CWRS wheat bids rising with U.S. weather concerns

A stronger loonie during the week accounted for a decline in basis levels

Hard red spring wheat bids in Western Canada continued to rise with U.S. futures during the week ended June 16, as hot and dry conditions in the major wheat-growing regions of the Dakotas and Montana floated all boats.

Depending on the location, average Canada Western Red Spring (CWRS) wheat prices were up by $7-$10 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 $264 per tonne in western Manitoba, to as high as $282 in northern Alberta.

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Quoted basis levels varied from location to location, but generally lost about $4 on average to range from about $28 to $45 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. Strength in the Canadian currency over the course of the week accounted for the decline in basis levels.

When accounting for currency exchange rates by adjusting Canadian prices to U.S. dollars, CWRS bids ranged from US$200 to US$213 per tonne. That would put the currency-adjusted basis levels at about US$23-$36 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 $30 to $48 below the futures.

Canada Prairie Spring Red (CPSR) wheat bids were up by $8-$10 per tonne, with prices ranging from $180 to $195 per tonne.

Average durum prices lost $1-$4, with bids in Saskatchewan coming in at about $259-$266 per tonne.

The July spring wheat contract in Minneapolis, off of which most CWRS contracts Canada are based, was quoted June 16 at US$6.4275 per bushel, up 36.25 U.S. cents from the previous week.

Kansas City hard red winter wheat futures, traded in Chicago, are more closely linked to CPSR in Canada. The July K.C. wheat contract was quoted June 16 at US$4.735 per bushel, up 22 U.S. cents compared to the previous week.

The July Chicago Board of Trade soft wheat contract settled June 16 at US$4.6525, up 19.5 U.S. cents on the week.

The Canadian dollar settled June 16 at 75.57 U.S. cents, up more than a cent relative to its U.S. counterpart compared to the previous 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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