Falling U.S. futures weigh on Prairie wheat bids

CNS Canada — Hard red spring wheat bids in Western Canada lost ground during the week ended Friday, as losses in U.S. futures more than offset the supportive influence of the declining Canadian dollar.

Average Canada Western Red Spring (CWRS, 13.5 per cent protein) wheat prices were down by $3-$11 per tonne over the course of the week, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Average prices ranged from about $252 per tonne in southeastern Saskatchewan to as high as $273 in southern Alberta.

Quoted basis levels varied from location to location, but generally softened by a dollar or two, to range from $43 to $64 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$186 to US$201 per tonne. That would put the currency adjusted basis levels at about US$7-$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 $9 to $30 below the futures.

Canada Prairie Spring Red (CPRS) wheat bids were mixed, although prices were down in most locations to range from $232 to $248 per tonne.

Average durum prices were up by $5 across the Prairies. Prices in southern Saskatchewan, where the bulk of the crop is grown, came in at about $220-$228 per tonne.

The March spring wheat contract in Minneapolis, off of which most CWRS contracts Canada are based, was quoted Friday at US$5.6125 per bushel, down 22.75 U.S. 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 Monday at US$5.0275 per bushel, down by 15.5 U.S. cents compared to the previous week.

The March Chicago Board of Trade soft wheat contract settled Friday at US$5.14, down by 16 U.S. cents on the week.

The Canadian dollar settled Friday at 73.71 U.S cents on Dec. 21, down roughly one full cent relative to its U.S. counterpart.

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

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Phil Franz-Warkentin writes for MarketsFarm specializing in grain and commodity market reporting.


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