Dropping U.S. futures push Prairie wheat bids down

Winnipeg – Wheat bids in Western Canada were down again for the week ended Sept. 7, following the lead of the United States futures markets. While U.S. futures dropped significantly, a weaker Canadian dollar held back losses for Prairie wheat bids.

Average Canada Western Red Spring (13.5 percent CWRS) wheat prices were down by C$1 to C$2 per tonne, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Average prices ranged from about C$230 per tonne in northwestern Saskatchewan, to as high as C$258 in southern Alberta.

Quoted basis levels varied from location to location and ranged from $1 to $29 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 U.S. dollars (C$1=US$0.7596) CWRS bids ranged from US$175 to US$196 per tonne. That would put the currency adjusted basis levels at about US$33 to US$54 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 C$43 to C$71 below the futures.

Canada Prairie Red Spring (CPRS) wheat bids were weaker, dropping anywhere from C$8 to C$9 per tonne depending on the location. Prices ranged from C$203 to C$220 per tonne.

Average durum prices were lower, with bids ranging anywhere from C$223 in northwestern Saskatchewan to C$249 in southern Alberta, depending on the location.

The December spring wheat contract in Minneapolis, which most CWRS contracts Canada are based off of, was quoted at US$5.7000 per bushel on Sept. 7, down by 13.75 U.S. cents from the previous week.

The Kansas City hard red winter wheat futures, which are now traded in Chicago, are more closely linked to CPRS in Canada. The December Kansas City wheat contract was quoted at US$5.1475 per bushel on Sept. 7, down by 26.25 U.S. cents compared to the previous week.

The December Chicago Board of Trade soft wheat contract settled at US$5.1125 per bushel on Sept. 7, down by 23.75 cents on the week.

The Canadian dollar settled at 75.96 U.S cents on Sept. 7, which was down by more than a cent on the week.

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