MarketsFarm — A sharp reduction of wheat acres in war-torn Ukraine and poor crop conditions in the United States all brought support to wheat bids in Western Canada for the week ended Thursday.
Russia’s invasion of Ukraine has not only posed major difficulties exporting grain out of the country, but will also prevent wheat acres from being harvested. Consulting agency UkrAgroConsult is projecting a 27 per cent drop in harvested wheat acres and an average yield 17 per cent lower than in 2021-22, to result in a 38 per cent reduction in wheat production.
Read Also
Alberta crop conditions improve: report
Varied precipitation and warm temperatures were generally beneficial for crop development across Alberta during the week ended July 8, according to the latest provincial crop report released July 11.
Meanwhile, the U.S. Department of Agriculture (USDA) resumed its weekly crop progress reports on Monday with the latest ratings bringing support to wheat futures. Only 30 per cent of U.S. winter wheat was rated good-to-excellent, as drought persisted over the western half of the continental U.S., including the U.S. Plains. Predictions from analysts prior to the report ranged from 32 to 47 per cent.
The Canadian dollar losing more than half a U.S. cent also supported wheat bids.
Canada Western Red Spring (CWRS, 13.5 per cent protein) wheat prices gained $13.20-$17.20 per tonne, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Average prices were between $481.40 in southeastern Saskatchewan and $499.80 in northern Alberta.
Quoted basis levels ranged between $77.40 and $95.80 above the futures when using the grain company methodology of quoting the basis as the difference between U.S. dollar-denominated futures and Canadian dollar cash bids.
Accounting for exchange rates and adjusting Canadian prices to U.S. dollars, CWRS bids were from US$382.60 to US$397.20 per tonne. Currency-adjusted basis levels ranged from US$6.80 to US$21.40 below the futures. If the futures were converted to Canadian dollars, basis levels would be $5.40 to $17 below the futures.
Average Canada Prairie Spring Red (CPSR, 11.5 per cent protein) prices rose $28.20-$33.70 per tonne. The lowest average bid for CPSR wheat was $442.30 in southeastern Saskatchewan, while the highest average bid was $462.30 in northern Alberta.
Meanwhile, average Canada Western Amber Durum (CWAD) prices were mixed, losing $3.10 to adding $2.90 per tonne with bids ranging from $562.50 in southern Alberta to $585.20 in northeastern Saskatchewan.
The May spring wheat contract in Minneapolis, off of which most CWRS contracts in Canada are based, was quoted Thursday at US$10.995, 20 U.S. cents higher than the previous week.
Kansas City hard red winter wheat futures, traded in Chicago, are more closely linked to CPSR in Canada. The May K.C. wheat contract was quoted Thursday at US$10.7075, rising 41 U.S. cents.
The May Chicago Board of Trade wheat contract increased 14 cents from the previous week, reaching US$10.20 on Thursday.
The Canadian dollar lost 0.56 U.S. cent from the previous week, to close Thursday at 79.47 U.S. cents.
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.
