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Hard red wheat bids rise in Western Canada

Rising U.S. wheat futures values have helped offset strength in the Canadian dollar

Hard red spring wheat bids in Western Canada posted solid gains during the week ended Sept. 21, as advances in U.S. futures provided support and countered the bearish influence of the rising Canadian dollar.

Average Canada Western Red Spring (CWRS, 13.5 per cent protein) wheat prices were up by $4-$7 per tonne over the course of the week, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Average prices ranged from about $240 per tonne in southeastern Saskatchewan to as high as $263 in southern Alberta.

Quoted basis levels varied from location to location and ranged from $11 to $34 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.

When accounting for currency exchange rates by adjusting Canadian prices to U.S. dollars, CWRS bids ranged from US$186 to US$204 per tonne. That would put the currency-adjusted basis levels at about US$25-$43 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 $55 below the futures.

Canada Prairie Spring Red (CPSR) wheat bids were stronger, gaining anywhere from $6 to $7 per tonne depending on the location. Prices ranged from $211 to $229 per tonne.

Average durum prices were lower, losing anywhere from $8 to $13 per tonne. Prices in southern Saskatchewan, where the bulk of the crop is grown, came in at about $213-$220 per tonne.

The December spring wheat contract in Minneapolis, off of which most CWRS contracts Canada are based, was quoted Sept. 21 at US$5.825 per bushel, up 10.25 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 December K.C. wheat contract was quoted at US$5.2525 per bushel on Sept. 21, up 9.75 U.S. cents compared to the previous week.

The December Chicago Board of Trade soft wheat contract settled at US$5.2175 on Sept. 21, up by 10.25 U.S. cents on the week.

The Canadian dollar settled Sept. 21 at 77.42 U.S. cents, up by about two-thirds of a cent on the week.

About the author

Columnist

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

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