Prairie cash wheat: Soft Minneapolis futures weigh on bids

MGEX December 2019 spring wheat with 20-, 50- and 100-day moving averages. (Barchart)

MarketsFarm — Wheat bids in Western Canada were lower during the week ended Thursday, pressured by losses in U.S. futures.

Hard red spring prices saw the largest drop, as Minneapolis futures trended lower despite adverse weather conditions across the U.S. Plains that helped underpin Chicago and Kansas City winter wheats.

Average Canada Western Red Spring (CWRS, 13.5 per cent protein) wheat prices were down by $5-$7.50 per tonne, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Average prices ranged from about $207 per tonne in northeastern Saskatchewan to as high as $224 per tonne in southern Alberta.

Quoted basis levels varied from location to location and ranged from $25 to $42 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 everything into Canadian dollars, CWRS basis levels ranged from $10 to $20 below the futures. The Canadian dollar basis showed an improvement of $5-$8 per tonne over the week, as concerns over the quality of Canada’s crop helped prop up prices compared to the U.S. futures.

Bids for Canada Prairie Spring Red (CPSR) wheat were down $1-$2 per tonne. Prices ranged from $176 per tonne in southeastern Saskatchewan to $200 per tonne in southern Alberta.

Average durum prices were down $1-$2 per tonne across the Prairies, with bids ranging anywhere from $265 to $284 per tonne.

The December spring wheat contract in Minneapolis, off of which most CWRS contracts Canada are based, was quoted Thursday at US$4.9525 per bushel, down 18 cents from the previous week.

Kansas City hard red winter wheat futures, traded in Chicago, are more closely linked to CPSR in Canada. The December K.C. wheat contract was quoted Thursday at US$4.21 per bushel, down 1.25 cents compared to the previous week.

The December Chicago Board of Trade soft wheat contract settled at US$5.09 per bushel on Nov. 21, up 1.5 cents on the week.

The Canadian dollar closed Thursday at 75.27 U.S. cents, a decline of roughly a 10th of a cent compared to the previous week.

— Phil Franz-Warkentin reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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


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