Prairie wheat bids drift down with U.S. futures

CNS Canada — Cash spring wheat bids across Western Canada edged lower in most locations during the week ended Friday, as losses in the U.S. futures weighed on values.

However, basis levels saw some slight improvement in many locations, as Canadian wheat has continued to see more stable export demand compared to U.S.-origin supplies.

Average Canada Western Red Spring (CWRS) wheat prices were down by about $2 per tonne at most locations over the course of the week, with only eastern Manitoba seeing a modest 50-cent-per-tonne weekly increase, according to price quotes from a cross-section of delivery points across the Prairie provinces compiled by PDQ (Price and Data Quotes).

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Average prices ranged from about $217 per tonne in southeastern Saskatchewan to as high as $232 in southern Alberta.

Quoted basis levels varied from location to location, but improved by about $1 per tonne on average to sit at roughly $39-$54 per tonne 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.

When accounting for currency exchange rates by adjusting Canadian prices to U.S. dollars, CWRS bids ranged from US$156 to $167 per tonne. That would put currency-adjusted basis levels at about US$11-$22 below the futures.

Looking at it the other way around, if the Minneapolis futures are converted to Canadian dollars, CWRS basis levels across Western Canada range from $15 to $30 below the futures.

Average Canada Prairie Spring Red (CPSR) bids were narrowly mixed, with local bids up or down $1-$2 compared to the previous week. Average CPSR prices came in at about $171-$175 per tonne in Saskatchewan, and $184-$190 per tonne in Alberta.

Average durum prices held relatively steady during the week. Bids in southern Saskatchewan, where the bulk of the crop is grown, were up by $1, to sit at roughly $307 per tonne.

The March spring wheat contract in Minneapolis, off of which most CWRS contracts in Canada are based, was quoted at US$4.85 per bushel on Friday, down US6.25 cents from the previous week.

Kansas City hard red winter wheat futures, traded in Chicago, are more closely linked to CPSR in Canada. The March K.C. wheat contract was quoted Friday at US$4.4425 per bushel, down US9.25 cents compared to the previous week.

The March Chicago Board of Trade (CBOT) soft wheat contract settled at US$4.575 on Friday, US9.25 cents lower compared to one week earlier.

The Canadian dollar closed Friday at US72.14 cents, up by about a quarter cent relative to its U.S. counterpart compared to the previous week.

Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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