Winnipeg (CNS Canada) – Hard red spring wheat bids in Western Canada moved lower during the week ended March 29, as losses in the Minneapolis futures weighed on values.
A report from the United States Department of Agriculture predicting much larger spring wheat acres in the country than many analysts had expected accounted for the sell-off in the futures that spilled into Canadian cash prices. The USDA pegged intended U.S. spring wheat area in 2018 at 11.6 million acres, which would be well above the 9.6 million seeded in 2017. Statistics Canada releases its first survey-based estimates on Canada’s crop on April 27.
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Depending on the location, average Canada Western Red Spring (13.5% CWRS) wheat prices were down by C$9 to C$10 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 C$227 per tonne in western Manitoba and southeastern Saskatchewan, to as high as C$242 in northern Alberta.
Quoted basis levels varied from location to location and ranged from $2 per tonne below the futures to $13 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$0.7756) CWRS bids ranged from US$176 to US$188 per tonne. That would put the currency adjusted basis levels at about US$41 to US$53 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$53 to C$68 below the futures.
Canada Prairie Red Spring (CPRS) wheat bids were narrowly mixed, although the bias was slightly weaker in most locations. Prices ranged from C$182 to C$195 per tonne.
Average durum prices were steady to slightly lower, with bids in Saskatchewan coming in at about C$254 to C$263 per tonne.
The May spring wheat contract in Minneapolis, which most CWRS contracts Canada are based off of, was quoted at US$5.7850 per bushel on March 29, down by 24.25 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 May Kansas City wheat contract was quoted at US$4.6725 per bushel on March 29, down by eight U.S. cents compared to the previous week.
The May Chicago Board of Trade soft wheat contract settled at US$4.5100 on March 29, which was down by 9.25 U.S. cents on the week.
The Canadian dollar settled at 77.56 U.S cents on March 29, which was down by roughly a fifth of a cent on the week.
