Prairie cash wheat: Loonie, U.S. prices trigger steep declines

U.S. wheat futures well down on week

MarketsFarm — Wheat bids in Western Canada were significantly lower for the week ended Thursday.

Those includes double-digit losses for Canada Western Red Spring (CWRS) wheat and Canada Prairie Spring Red (CPSR). Losses in Canada Western Amber Durum (CWAD) were relatively smaller.

Pressure came from sharp losses in U.S. markets and equally sharp gains in the Canadian dollar.

Average CWRS (13.5 per cent protein) wheat prices were down $13-$15 per tonne, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes).

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Average CWRS prices ranged from about $206 per tonne in eastern Saskatchewan, to as high as $222 per tonne in northern Alberta.

Quoted basis levels varied from location to location and ranged from $23 to $40 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$155 to US$167 per tonne. That would put the currency-adjusted basis levels at about US$15 to US$27.50 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 $11 to $21 below the futures.

Average CPSR (11.5 per cent) wheat prices were down $15-$19 per tonne. Bids ranged from $177 per tonne in southeastern Saskatchewan to $193 per tonne in northern and southern Alberta.

Average durum prices were down $4-$7, with bids ranging from $270 per tonne in western Saskatchewan to $283 per tonne in western Manitoba.

The September spring wheat contract in Minneapolis, off of which most CWRS contracts in Canada are based, was quoted Thursday at US$4.96 per bushel, falling 17 cents from the previous week.

Kansas City hard red winter wheat futures, traded in Chicago, are more closely linked to CPSR in Canada. The September K.C. wheat contract was quoted Thursday at US$4.1725 per bushel, dropping 22.75 cents compared to the previous week.

The September Chicago Board of Trade soft wheat contract settled Thursday at US$5.0125 per bushel, plummeting 28.25 cents from the previous week.

The Canadian dollar closed Thursday at 75.23 U.S. cents, rising 0.78 cent on the week.

— Glen Hallick reports for MarketsFarm from Winnipeg.

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