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Prairie wheat bids drop with U.S. futures

USDA’s outlook for record-low winter wheat acres was still above expectations

Hard red spring wheat bids in Western Canada moved lower during the week ended Jan. 12, as the futures in the U.S. fell sharply on Friday in response to bearish acreage data from the U.S. Department of Agriculture.

While USDA pegged winter wheat seedings in the country at their lowest level in more than 100 years, the 32.6 million acres still came in well above trade expectations.

Depending on the location, average Canada Western Red Spring (CWRS, 13.5 per cent protein) wheat prices were down by $3-$7 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 $227 per tonne in western Manitoba to as high as $248 in parts of Alberta.

Quoted basis levels varied from location to location, but generally improved by about a dollar per tonne from $2 to $23 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$181 to US$198 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$27-$44 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 $34 to $55 below the futures.

Canada Prairie Spring Red (CPSR) wheat bids were steady to slightly higher in most locations, with prices ranging from $175 to $195 per tonne.

Average durum prices held relatively steady, with bids in Saskatchewan coming in at about $270-$274 per tonne.

The March spring wheat contract in Minneapolis, off of which most CWRS contracts Canada are based, was quoted Jan. 12 at US$6.1275 per bushel, down 14 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 March K.C. wheat contract was quoted at US$4.2625 per bushel on Jan. 12, down 11.25 U.S. cents compared to the previous week.

The March Chicago Board of Trade soft wheat contract settled at US$4.205 on Jan. 12, down 10.25 U.S. cents on the week.

The Canadian dollar settled Jan. 12 at 79.97 U.S. cents, down roughly two-thirds of a cent on the week.

About the author

Columnist

Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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