MarketsFarm — Comments from Russian President Vladimir Putin brought more uncertainty to Ukrainian wheat shipments, which in turn helped raise western Canadian wheat bids for the week ended Thursday.
On Wednesday at an economic forum in the eastern Russian city of Vladivostok, Putin said the Ukrainians were “cheating,” adding that grain shipments from the country were not going to developing nations but rather countries in the European Union.
Putin called for the agreement allowing Ukraine to ship grain on the Black Sea to be amended as to limit the number of countries Ukraine can ship grain to.
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U.S. grains: Wheat futures rise on supply snags in top-exporter Russia
U.S. wheat futures closed higher on Thursday on concerns over the limited availability of supplies for export in Russia, analysts said.
As winter wheat seeding begins in the U.S., 71 per cent of spring wheat was harvested as of Sunday, according to the U.S. Department of Agriculture (USDA). The figure was four points better than estimated, but 12 points behind the historical average. Winter wheat was three per cent planted, equal to the historical average, but hot and dry conditions are forecast for the U.S. southern Plains over the next few days.
Statistics Canada (StatCan) on Wednesday released its 2021-22 ending stocks report, with total wheat stocks at 3.671 million tonnes, down 38.3 per cent from the year before due to the 2021 drought. However, harvest pressures, a strengthening Canadian dollar and projections for Australia’s second-largest record wheat crop at 32.2 million tonnes are bringing bids down.
Canada Western Red Spring (CWRS, 13.5 per cent protein) wheat prices were mixed, up $1.70 to down $3.10 per tonne, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Average prices were between $368.60 in southeastern Saskatchewan to $394.10 in southern Alberta.
Quoted basis levels ranged between $38.50 and $64.10 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 from US$281 to US$300.50 per tonne. Currency-adjusted basis levels ranged from US$29.60 to US$49.10 below the futures. If the futures were converted to Canadian dollars, basis levels would be $22.60 to $37.40 below the futures.
Average Canada Prairie Spring Red (CPSR, 11.5 per cent protein) prices gained $2.40-$6.50 per tonne. The lowest average bid for CPSR wheat was $350.70 in southeastern Saskatchewan, while the highest average bid was $375.60 in southern Alberta.
Meanwhile, average Canada Western Amber Durum (CWAD) prices were down $5.60-$10.40 per tonne with bids ranging from $386.10 in southeastern Saskatchewan to $401.80 in southern Alberta.
The December spring wheat contract in Minneapolis, off of which most CWRS contracts in Canada are based off of, was quoted at US$8.9825 per bushel on Thursday and 12 U.S. cents higher than 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 at US$8.93/bu., up 25 U.S. cents.
The December Chicago Board of Trade wheat contract gained 34.75 U.S. cents from the previous week at US$8.29/bu.
The Canadian dollar gained 0.29 of a U.S. cent from the previous week, to close Thursday at 76.24 U.S. cents.
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.
