Hard red spring wheat bids correct lower

Hard red spring wheat bids in Western Canada ran into some technical resistance during the week ended July 7, as the rally that had sustained a meteoric rise in wheat country subsided on ideas the gains were overdone.

Depending on the location, average Canada Western Red Spring (CWRS) wheat prices were down by $17-$22 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 $291 per tonne in western Manitoba to as high as $307 in eastern Manitoba.

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Quoted basis levels varied from location to location, but generally ranged from about $13-$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$226 to US$238 per tonne. That would put the currency-adjusted basis levels at about US$40 to US$52 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 $52 to $67 below the futures.

Canada Prairie Spring Red (CPSR) wheat bids were anywhere from $1 lower to $6-per-tonne higher, with prices ranging from $209 to $222 per tonne.

Average durum prices were $24 to $41 higher, with bids in Saskatchewan coming in at about $512 to $515 per tonne.

The September spring wheat contract in Minneapolis, off of which most CWRS contracts Canada are based, was quoted July 7 at US$7.6675 per bushel, down by five 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 September K.C. wheat contract was quoted at US$5.43 per bushel on July 7, up by roughly 14 U.S. cents compared to the previous week.

The September Chicago Board of Trade soft wheat contract settled July 7 at US$5.35, up by nine U.S. cents on the week.

The Canadian dollar settled July 7 at 77.6 U.S. cents, up by roughly half a cent on the week.

About the author

Columnist

Dave Sims

Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Dave has a deep background in the radio industry and is a graduate of the University of Winnipeg. He lives in Winnipeg with his wife and two beautiful children. His hobbies include reading, podcasting and following the Atlanta Braves.

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