The Canadian Grain Commission (CGC) reported 350,100 tonnes of wheat were exported during the week ended July 21, the second-last week of the 2023-24 marketing year. The amount was higher than the 306,000 tonnes exported the week before. Cumulative Canadian wheat exports for 2023-24 were 20.738 million tonnes, compared to 19.162 million one year earlier.

The Bank of Canada (BoC) cut its key interest rate by 25 basis points at 4.5 per cent on July 24, immediately putting pressure on the loonie.

The United States Wheat Quality Council saw much improved spring wheat and durum yields in its annual tour in North Dakota. The average yield was estimated at 54.5 bushels per acre, up from 47.4 bu./acre last year and the five-year average of 42 bu./acre.

However, the U.S. Department of Agriculture reported 309,300 tonnes of wheat sold for export during the week ended July 18, near the lower end of trade expectations. Cumulative exports this marketing year were 2.463 million tonnes, slightly better than last year’s pace.

Canadian Western Red Spring (CWRS) wheat prices were on both sides of unchanged, losing C$0.60 per tonne to gaining C$3.20, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Average prices were between C$272.50/tonne in southeast Saskatchewan to C$297.30 in southern Alberta.

Quoted basis levels ranged from between C$50.60 to C$75.50/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.

Accounting for exchange rates and adjusting Canadian prices to U.S. dollars (C$1=US$0.7236), CWRS bids were from US$197.20 to US$215.10/tonne. Currency adjusted basis levels ranged from US$6.70 to US$24.70 below the futures. If the futures were converted to Canadian dollars, basis levels would be C$4.90 to C$17.90 below the futures.

Meanwhile, Canadian Prairie Red Spring (CPRS) prices reported a decline of C$2.80 per tonne to an increase of C$3.60. The lowest average bid for CPRS was C$250.50 in southeast Saskatchewan, while the highest average bid was C$269.40 in northern Alberta.

The average prices for Canada Western Amber Durum (CWAD) were down C$0.40 to C$2.80 per tonne with bids between C$301.30 in northwestern Saskatchewan to C$316.80 in western Manitoba.

The September spring wheat contract in Minneapolis, which most CWRS contracts are based off of, was quoted at US$6.0375 per bushel on July 25 and 3.25 U.S. cents higher than the previous week.

The Kansas City hard red winter wheat futures, which are now traded in Chicago, are more closely linked to CPSR in Canada. The September contract was quoted at US$5.6150/bu., down 1.25 U.S. cents.

The September Chicago Board of Trade (CBOT) wheat contract gained 2.50 U.S. cents from the previous week at US$5.3775/bu.

The Canadian dollar dropped 1.04 U.S. cents to close at 72.36 cents U.S. on July 25.

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Russia/Ukraine: The amount of wheat grown in Russia and Ukraine could have an outsized influence on commodities. Frosts, coupled with lack of moisture and a switch to hotter temperatures, seriously cut into production estimates, causing wheat futures in the U.S. and Europe to climb. The combined Russia/Ukraine wheat crop is at risk of coming in below 100 million tonnes for the first time since 2018-19.

India: Official stocks in the country’s government warehouses have fallen to their lowest level in 16 years after poor local production in the past two years saw much of those reserves released to lower prices and boosted domestic supplies. There’s talk now that India could be in the market to buy a few million tonnes of wheat. The notion that India could import wheat for the first time in six years has been enough to boost futures prices. India has a 40 per cent tax on wheat imports, but the market expects that duties will likely be dropped at the end of June.

Canada: Supply tightness and increased demand elsewhere in the world opens the door for more Canadian exports, depending on the size of this year’s crop. Old crop Canadian wheat exports of 18.04 million tonnes through 43 weeks of the crop year are running about 9.5 per cent ahead of what moved by the same time last year. Record sales are likely if the pace is maintained. Canadian wheat bids have generally strengthened in sympathy with the U.S. futures over the past few months, although old crop bids remain about $30 to $40 per tonne below the year-ago levels heading into the summer months.

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Good planting progress for U.S. spring wheat, and its first crop ratings of 2024, weighed on values. As did decent ratings for U.S. winter wheat as its harvest began to pick up the pace.

There was very little net change in the Canadian dollar during the week, as it flirted with either side of 73 U.S. cents.

Concerns about frost and dry conditions taking a heavy toll on the Russian wheat crop have likely run their course, offering little support.

Average CWRS (13.5%) prices dropped C$15.60 to C$18.10 per tonne, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Those prices ranged from about C$317.10 per tonne in southeastern Saskatchewan to C$335.60 per tonne in southern Alberta.

Quoted basis levels varied from location to location and ranged from C$57.50 to C$75.90 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 United States dollars (C$1=US$0.7307), CWRS bids ranged from US$231.70 to US$245.20 per tonne. That would put the currency adjusted basis levels at about US$14.50 to US$28.00 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 ranged from C$14.50 to C$20.40 below the futures.

Average CPRS (11.5%) wheat fell C$15.40 to C$17.10 per tonne. Bids ranged from C$297.50 per tonne in southeastern Saskatchewan to C$318.40 per tonne in northern Alberta.

Average CWAD prices lost C$7.90 to C$17.80 per tonne. Bids ranged from C$362.70 per tonne in northwestern Saskatchewan to C$376.90 per tonne in western Manitoba.

The July spring wheat contract in Minneapolis, which most CWRS contracts Canada are based off of, was quoted at US$7.0675 per bushel on June 6, losing 35.25 cents on the week.

The Kansas City hard red winter wheat futures, which are now traded in Chicago, are more closely linked to CPRS in Canada. The July Kansas City wheat contract was quoted at US$6.7800 per bushel on June 6, down 31.50 cents compared to a week ago.

The July Chicago Board of Trade soft wheat contract settled at US$6.3950 per bushel on June 6, tumbling 41.50 cents.

The Canadian dollar closed June 6 at 73.07 U.S. cents, easing back 4/100ths of a cent.

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While Minneapolis and Kansas City wheat eased back, Chicago wheat was down hard. However, support for Canadian prices came from a weaker dollar relative to its United States counterpart.

Average CWRS (13.5%) prices rose C$2.90 to C$4.00 per tonne, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Those prices ranged from about C$299.50 per tonne in southeastern Saskatchewan to C$320.10 per tonne in southern Alberta.

Quoted basis levels varied from location to location and ranged from C$63.30 to C$83.80 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 United States dollars (C$1=US$0.7265), CWRS bids ranged from US$217.60 to US$232.50 per tonne. That would put the currency adjusted basis levels at about US$3.70 to US$18.70 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 ranged from C$2.70 to C$13.60 below the futures.

Average CPRS (11.5%) wheat gained 10 cents to C$2.40 per tonne. Bids ranged from C$270.20 per tonne in southeastern Saskatchewan to C$293.20 per tonne in southern Alberta.

Average CWAD prices added C$2.70 to C$4.50 per tonne. Bids ranged from C$393.70 per tonne in northwestern Saskatchewan to C$402.80 per tonne in western Manitoba.

The July spring wheat contract in Minneapolis, which most CWRS contracts Canada are based off of, was quoted at US$6.4300 per bushel on Apr. 18, giving up 2.25 cents on the week.

The Kansas City hard red winter wheat futures, which are now traded in Chicago, are more closely linked to CPRS in Canada. The July Kansas City wheat contract was quoted at US$5.7525 per bushel on Apr. 18, down 3.25 cents compared to a week ago.

The July Chicago Board of Trade soft wheat contract settled at US$5.5300 per bushel on Apr. 18, dropping 13.25 cents.

The Canadian dollar closed Apr. 18 at 72.65 U.S. cents, losing almost four-tenths of a cent.

— Glen Hallick reports for MarketsFarm from Winnipeg. 

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Traders in the United States looked forward to the U.S. Department of Agriculture’s Prospective Plantings and Quarterly Stocks reports, which were released on March 28. The average trade guess for 2024-25 all wheat acres in the U.S. is 47.3 million, down 2.3 million from the previous year. Spring wheat acres are expected to make up 10.9 million. U.S. wheat stocks are projected to rise by 61 million bushels on average at 1.05 billion.

Despite dry and deteriorating growing conditions over the past two weeks, SovEcon raised its Russian wheat crop forecast by 400,000 tonnes at 94 million, up 1.2 million from last year. Dry conditions will remain at the start of April on the Prairies, with little precipitation and high temperatures rising above 10 degrees Celsius in Saskatchewan and Alberta.

CWRS wheat prices were down C$0.60 to C$3.40 per tonne, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Average prices were between C$294.50/tonne in southeast Saskatchewan to C$317.50 in southern Alberta.

Quoted basis levels ranged from between C$55.30 to C$78.30/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.

Accounting for exchange rates and adjusting Canadian prices to U.S. dollars (C$1=US$0.7360), CWRS bids were from US$216.70 to US$233.60/tonne. Currency adjusted basis levels ranged from US$5.60 to US$22.50 below the futures. If the futures were converted to Canadian dollars, basis levels would be C$4.10 to C$16.50 below the futures.

Meanwhile, CPRS prices were up C$0.30 to C$1.20/tonne. The lowest average bid for CPRS was C$258.70 in southeast Saskatchewan, while the highest average bid was C$281.40 in northern Alberta.

The average prices for Canada Western Amber Durum (CWAD) were up C$3.70 to C$6.60 per tonne with bids between C$396.90 in northwest Saskatchewan to C$403.40 in southeast Saskatchewan.

The May spring wheat contract in Minneapolis, which most CWRS contracts are based off of, was quoted at US$6.51 per bushel on March 27 and 5.5 U.S. cents lower than the previous week.

The Kansas City hard red winter wheat futures, which are now traded in Chicago, are more closely linked to CPSR in Canada. The May contract was quoted at US$5.7825/bu., down 3.5 U.S. cents.

The May Chicago Board of Trade (CBOT) wheat contract gained 0.75 of a U.S. cent from the previous week at US$5.475/bu.

The Canadian dollar dropped 0.34 of a U.S. cent to close at 73.60 cents U.S. on March 27.

—Adam Peleshaty reports for MarketsFarm from Stonewall, Man. 

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The relatively low prices created some interest in the export market. The U.S. Department of Agriculture (USDA) reported net wheat export sales of 451,400 tonnes in its weekly report on Jan. 25, down 36 per cent from the previous week but up 45 per cent from the four-week average. Recent severe cold weather in the northwestern U.S. Plains may have also caused some crop damage.

Agriculture and Agri-Food Canada (AAFC) released its first projections for the 2024-25 marketing year on Jan. 22. They forecasted a three per cent decline in non-durum wheat acres at 8.248 million hectares, while durum area was steady at 2.477 million. However, total wheat production is expected to increase to 33.3 million tonnes, as well as total wheat carryout to 4.2 million.

Canadian Western Red Spring (CWRS) wheat prices were up C$7.10 to C$8.60 per tonne, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Average prices were between C$315.60/tonne in western Manitoba to C$341.50 in southern Alberta.

Quoted basis levels ranged from between C$55 to C$81/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.

Accounting for exchange rates and adjusting Canadian prices to U.S. dollars (C$1=US$0.7410), CWRS bids were from US$233.80 to US$253/tonne. Currency adjusted basis levels ranged from US$7.50 to US$26.70 below the futures. If the futures were converted to Canadian dollars, basis levels would be C$5.60 to C$19.80 below the futures.

Meanwhile, Canadian Prairie Red Spring (CPRS) prices were up C$11.10 to C$13.40/tonne. The lowest average bid for CPRS was C$273.10 in southeast Saskatchewan, while the highest average bid was C$302 in southern Alberta.

The average prices for Canada Western Amber Durum (CWAD) were C$2.90 to C$5.20 per tonne lower with bids between C$439.50 in northeast Saskatchewan to C$448.10 in southern Alberta.

The March spring wheat contract in Minneapolis, which most CWRS contracts are based off of, was quoted at US$7.09 per bushel on Jan. 25 and 21 U.S. cents higher than the previous week.

The Kansas City hard red winter wheat futures, which are now traded in Chicago, are more closely linked to CPSR in Canada. The March Kansas City wheat contract was quoted at US$6.37/bu., up 31.75 U.S. cents.

The March Chicago Board of Trade (CBOT) wheat contract gained 26.75 U.S. cents from the previous week at US$6.1225/bu.

The Canadian dollar added 0.05 of a U.S. cent to close at 74.10 cents U.S. on Jan. 25.

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.

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Average Canada Western Red Spring (13.5%) wheat prices were down by C$1.60 to C$2.40 per tonne across the Prairies, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Average prices ranged from C$321.80 per tonne in northeastern Saskatchewan to as high as C$346.60 per tonne in southern Alberta.

Quoted basis levels varied from location to location and ranged from $53.80 to $78.50 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 everything into Canadian dollars (C$1=US$0.7363) CWRS basis levels ranged from C$9.50 to C$22.90 below the futures.

Canada Prairie Spring Red (CPSR) wheat bids were up by C$3.00 to C$7.60 per tonne, with prices ranging from C$274.20 to C$290.90 per tonne.

Average durum prices were down by C$2.30 to C$4.70 per tonne. Prices ranged from C$455.00 to C$465.20 per tonne.

Spring wheat futures in Minneapolis were up by 1.50 cents per bushel in the March contract to settle at US$7.2950 per bushel on Nov. 30.

The Kansas City hard red winter wheat futures, which are now traded in Chicago, are more closely linked to CPSR in Canada. The March Kansas City wheat contract was up by 18.75 cents on the week to close at US$6.4300 per bushel on Nov. 30.

The March Chicago Board of Trade soft wheat contract settled at US$5.9800 per bushel on Nov. 30, up by 13.50 cents on the week.

The Canadian dollar strengthened relative to its United States counterpart, rising by nearly two-thirds of a cent to settle at 73.63 U.S. cents on Nov. 30.

— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg.

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In a news release, Friday, the CGC simply stated it was repealing the alignment of primary and export tolerances for test weight and total foreign materials for Canada Western Red Spring, Canada Western Hard White Spring, Canada Western Extra Strong, Canada Western Soft White Spring and Canada Northern Hard Red.

It also repealed the alignment of total foreign material tolerances for Canada Western Amber Durum.

On July 27, traditional sparring partners the Wheat Growers Association (WGA) and National Farmers’ Union (NFU) issued a joint statement decrying the announced changes that would have seen the export grade standard applied to deliveries to country elevators.

They joined Sask Wheat and the Agricultural Producers Association of Saskatchewan (APAS), who issued a statement on July 17 calling for a halt to the grading changes, calling them “ill-considered and finalized hastily” as well as alleging it was done without proper producer consultation.

Historically there have been primary and export standards for wheat, and the primary standard was applied at country elevators where farmers deliver their grain.

“The NFU and WGA disagree on many policy matters but are united in their opposition to the decision to harmonize primary and export standards for wheat,” the statement read.

Under current rules, wheat must weigh a minimum of 60.1 pounds a bushel, or it will be downgraded to no. 2 wheat. Under the proposed changes, which were to come into force August 1, they’d need to weigh at least 63.3 pounds per bushel to avoid downgrading.

“Farmers across the prairies will soon be harvesting wheat that under the current rules would be graded as #1, but as of August 1, 2023 they will be forced to sell it at lower prices as a #2 instead, if the changes by the Canadian Grain Commission come into effect as planned,” Daryl Fransoo, WGA chair, said in the statement.

Terry Boehm, former president of the NFU, said in the statement the current regulations recognize the variability of growing conditions across the region and that justifies the slightly lower bushel weight in the country under the current regulations.

“Loads that grade #1 under current rules often exceed the minimum standards, allowing grain companies to blend country deliveries to ensure the export standard is met when they assemble shipments at their port terminals,” Boehm said.

He added the grade change will “…take money from farmers’ pockets.”

The proposal was brought before the Western Standards Committee, which the WGA and NFU are both members of, and met with “…opposition from virtually all the farmers on CGC’s Western Standards Committee.”

Initially the WGA offered “cautious support.”

“The updated standards are founded on science-based outcomes regarding sprouting, test-weight and foreign material tolerances,” WGA said in a media release in June.

The Western Grain Elevators Association (WGEA) spoke in favour of the grading changes, saying the harmonized standards will make payment to farmers fair as it means farmers will be paid for the quality they grow.

Otherwise, they’re harkening back to the Canadian Wheat Board days, when wheat was pooled, and farmers were paid an averaged-out price, said Wade Sobkowich, WGEA’s executive director in an interview with the Manitoba Co-operator.

WGEA lobbied for standard harmonization, CGC records show.

Blending of high and low-quality wheat can only do so much, Sobkowich added. More stringent standards will allow grain handlers to meet customer specifications, otherwise companies may have to specify test weight or foreign matter standards in their contracts, he said. They don’t want the grading system to become irrelevant.

–Geralyn Wichers reports for the Glacier Farmmedia network from Steinbach, Man.

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There were gains in Minneapolis spring wheat, while Kansas City and Chicago winter wheat contracts slipped back.

At the beginning of the week there were steep increases for wheat as Russian launched missile and drone attacks on Ukraine’s ports on the Black Sea, but also its ports on the Danube River. By Wednesday those gains had been erased as concerns over the war subsided.

The reduced severity of drought conditions across the Canadian Prairies and the United States Plains provided additional pressure on wheat.

Average Canadian Western Red Spring Wheat (CWRS, 13.5%) wheat prices declined 30 cents to C$5.40 per tonne, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Those prices ranged from about C$387.10 per tonne in southeastern Saskatchewan to C$408.00 per tonne in northern Alberta.   

Quoted basis levels varied from location to location and ranged from C$54.90 to C$75.80 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 United States dollars (C$1=US$0.7575), CWRS bids ranged from US$293.30 to US$309.10 per tonne. That would put the currency adjusted basis levels at about US$23.20 to US$39.00 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 ranged from C$17.60 to C$29.50 below the futures.

Average Canada Prairie Red Spring (CPRS, 11.5%) wheat prices lost C$5.70 to C$12.70 per tonne. Bids ranged from C$362.90 per tonne in southeastern Saskatchewan to C$381.20 per tonne in northern Alberta.

Average Canadian Western Amber Durum (CWAD) prices jumped C$42.00 to C$58.90 per tonne, with bids ranging from C$459.20 per tonne in southern Alberta to C$471.90 per tonne in western Manitoba.

The September spring wheat contract in Minneapolis, which most CWRS contracts Canada are based off of, was quoted at US$9.0425 per bushel on July 27, bumping up 2.25 cents on the week.

The Kansas City hard red winter wheat futures, which are now traded in Chicago, are more closely linked to CPRS in Canada. The September Kansas City wheat contract was quoted at US$8.6650 per bushel on July 27, adding 8.25 cents compared to a week ago.

 The September Chicago Board of Trade soft wheat contract settled at US$7.1275 per bushel on July 27, dropping 14.25 cents from the previous week.

The Canadian dollar eased back 0.17 of a cent at 75.75 U.S. cents, which provided some support to Canadian prices. However, during the week, the loonie pushed towards 76 U.S. cents before retreating.

— Glen Hallick reports for MarketsFarm from Winnipeg.

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The Wheat Growers Association (WGA) and National Farmers’ Union (NFU)have issued a joint statement decrying changes that will take effect August 1 which would see the export grade standard applied to deliveries to country elevators.

Historically there have been primary and export standards for wheat, and the primary standard was applied at country elevators where farmers deliver their grain.

Addressing the elephant in the room, the two groups noted the issue was broad enough that they chose to put aside their many differences.

“The NFU and WGA disagree on many policy matters but are united in their opposition to the decision to harmonize primary and export standards for wheat,” the statement reads.

They’ve also penned a joint letter to Lawrence MacAuley, the new federal agriculture minister, asking him to halt the change.

At the heart of the dispute is bushel weight. Under the current rules, wheat must weigh a minimum of 60.1 pounds a bushel, or it will be downgraded to no. 2 wheat. As of August 1 it must weigh at least 63.3 pounds per bushel to avoid downgrading.

“Farmers across the prairies will soon be harvesting wheat that under the current rules would be graded as #1, but as of August 1, 2023 they will be forced to sell it at lower prices as a #2 instead, if the changes by the Canadian Grain Commission come into effect as planned,” Daryl Fransoo, WGA chair, said in the statement.

Terry Boehm, former president of the NFU, said in the statement the current regulations recognize the variability of growing conditions across the region and that justifies the slightly lower bushel weight in the country under the current regulations.

“Loads that grade #1 under current rules often exceed the minimum standards, allowing grain companies to blend country deliveries to ensure the export standard is met when they assemble shipments at their port terminals,” Boehm said.

He added the grade change will “…take money from farmers’ pockets.”

The proposal was brought before the Western Standards Committee, which the WGA and NFU are both members of, and met with “…opposition from virtually all the farmers on CGC’s Western Standards Committee.”

Initially the WGA offered “cautious support.”

“The updated standards are founded on science-based outcomes regarding sprouting, test-weight and foreign material tolerances,” WGA said in a media release earlier this summer.

In the July 17 statement, Sask Wheat and the Agricultural Producers Association of Saskatchewan (APAS), also called for a halt to the grading changes, calling it “ill-considered and finalized hastily” as well as alleging it was done without proper producer consultation.

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