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Canadian wheat bids drift lower with U.S. futures

A show of strength from the loonie has kept a cap on prices

Hard red spring wheat bids in Western Canada lost some ground during the week ended Nov. 24, as declines in the U.S. futures and a firmer tone in the Canadian dollar weighed on values.

Depending on the location, average Canada Western Red Spring (13.5 per cent CWRS) wheat prices were down by $4 to $5 per tonne across the Prairie provinces, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Average prices ranged from about $238 per tonne in western Manitoba, to as high as $259 in northern Alberta.

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Quoted basis levels varied from location to location, but generally held steady to range from about $9 to $31 per tonne above the futures when using the grain company methodology of quoting the basis as the difference between the U.S. dollar-denominated futures and the Canadian dollar cash bids.

When accounting for currency exchange rates by adjusting Canadian prices to U.S. dollars (C$1=US$0.7869) CWRS bids ranged from US$187 to US$204 per tonne, which was unchanged on a U.S. dollar basis on the week. That would put the currency adjusted basis levels at about US$25 to US$42 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 $32 to $53 below the futures.

Canada Prairie Red Spring (CPRS) wheat bids were down by anywhere from $2 to $3 per tonne, with prices ranging from $167 to $188 per tonne.

Average durum prices held relatively steady, with bids in Saskatchewan coming in at about $267 to $281 per tonne.

The December spring wheat contract in Minneapolis, which most CWRS contracts Canada are based off of, was quoted at US$6.2350 per bushel on November 24, down by 11.50 U.S. cents from the previous week.

The Kansas City hard red winter wheat futures, which are now traded in Chicago, are more closely linked to CPRS in Canada. The December Kansas City wheat contract was quoted at US$4.1450 per bushel on Nov. 24, down by 5.50 U.S. cents compared to the previous week.

The December Chicago Board of Trade soft wheat contract settled at US$4.1575 on November 24, which was down by 11.00 U.S. cents on the week.

The Canadian dollar settled at 78.69 U.S. cents on November 24, which was up by roughly half a cent on the week.

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Phil Franz-Warkentin - MarketsFarm

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

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