MarketsFarm — Coming out of the holiday season, most western Canadian wheat bids were slightly lower for the week ended Thursday, as wheat futures in the U.S. continued to be bearish.
U.S. wheat exports continue to fall behind last year’s pace, as cheaper Russian wheat floods the market due to a potential record crop and a stronger greenback makes U.S. exports less attractive to international buyers. Soft red wheat growing areas in the U.S. are also approaching sufficient levels of winter moisture, while hard red wheat areas are still under severe drought. The rising number of COVID-19 infections in China may also hinder wheat demand.
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Wheat traders seem to be paying little attention to supportive factors on wheat prices, such as Russia’s missile attacks on Ukraine, a poor wheat crop in Argentina and a projected tightening of world wheat stocks. Russia is also being accused of slowing down inspections of Ukrainian grain vessels headed for the Black Sea, while the war risk insurance for some vessels was cancelled as of Jan. 1.
Canada Western Red Spring (CWRS, 13.5 per cent protein) wheat prices were mixed, declining $2.10 to gaining $1.90 per tonne, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Average prices were between $414.40/tonne in southeastern Saskatchewan and $435.90 in southern Alberta.
Quoted basis levels ranged from $80.40 to $101.90/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.
Accounting for exchange rates and adjusting Canadian prices to U.S. dollars, CWRS bids were US$305.50-$321.40 per tonne. Currency-adjusted basis levels ranged from US$12.60 to US$28.50 below the futures. If the futures were converted to Canadian dollars, basis levels would be $9.30-$21 below the futures.
Average Canada Prairie Spring Red (CPSR, 11.5 per cent protein) wheat prices were lower, down $1.20-$7.40/tonne. The lowest average bid for CPSR was $394.40/tonne in southeastern Saskatchewan, while the highest average bid was $412.80 in southern Alberta.
Meanwhile, average Canada Western Amber Durum (CWAD) prices were down by between 60 cents and $4.50/tonne, with bids ranging from $492.50 in southeastern Saskatchewan to $499.20 in southern Alberta.
The March spring wheat contract in Minneapolis, off of which most CWRS contracts in Canada are based, was quoted Thursday at US$9.09 per bushel, five U.S. cents lower than 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 Thursday at US$8.3975/bu., down 26.75 U.S. cents.
The March Chicago Board of Trade wheat contract, as of Thursday, lost 27.25 U.S. cents from the previous week at US$7.4675/bu.
The Canadian dollar was relatively steady, losing 0.04 of a U.S. cent to close at 73.72 U.S. cents on Thursday.
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.
