Take into account the exchange rate when comparing basis, says a provincial market specialist.
Since the ICE Canada futures is not actively traded, the grain trade uses the Minneapolis Hard Red Spring wheat futures for hedging Canadian hard red spring wheat, said Neil Blue. A recent elevator quote had hard red spring wheat basis at minus 16 cents a bushel. But when an 80-cent Canadian dollar was factored in, the recalculated basis was minus $1.63/bushel.
“For those grain buyers who do not calculate the basis in this way, it’s important that producers make the exchange rate adjustment in comparing basis levels of different companies,” said Blue.