Wheat bids in Western Canada have declined in sympathy with U.S. futures over the past few weeks, although demand is starting to show signs of picking back up.
Bids for both Canada Western Red Spring (CWRS) and Canada Prairie Spring (CPS) wheat at a cross-section of delivery points across Western Canada have declined by an average of C$16 per tonne since mid-December (44 cents per bushel).
The Minneapolis March spring wheat contract has fallen by over 60 cents per bushel over the same time frame. The March spring wheat contract in Minneapolis was trading at around US$8.41 per bushel on Monday.
That compares with top-end nearby CWRS bids ranging from about C$7.24 to C$7.70 per bushel across Western Canada, and CPS bids in the C$6.12 to C$7 per bushel range.
"The U.S. futures have declined substantially, which has caused the value of the wheat bids at the commercial elevators to drop as well," one Alberta-based grain broker said.
Prices on some lower protein varieties, such as CPS, had declined, he said, to a point where farmers could get a better return from selling into feed channels instead of the elevators — which should cause demand to pick up from that front.
"If the wheat futures continue to stay where they are at, or decline further, we’ll see more feed wheat" in rations, he added.
A second grain broker said the futures and cash markets for wheat were looking a little oversold, which could lead to a short-covering rally.
North American wheat had been the highest priced product in the world before the sell-off, but was now looking more competitive for exports again, he said.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.