Western Canadian wheat: Bids get support from U.S. gains

WINNIPEG, (MarketsFarm) – Wheat bids in Western Canada were higher for the week ended Sept. 12. There were gains in Canadian Western Red Spring Wheat (CWRS), Canada Prairie Red Spring (CPRS) and Canadian Western Amber Durum (CWAD) in all locations.

The Canadian dollar was up by more than a tenth of a cent, which tempered gains.

Average CWRS (13.5%) wheat prices were up by C$2 to C$3 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$174 per tonne in southeastern Saskatchewan to as high as C$223 per tonne in Southern Alberta.

Quoted basis levels varied from location to location and ranged from $18 to $37 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$0.7573) CWRS bids ranged from US$155 to US$168 per tonne. That would put the currency adjusted basis levels at about US$20 to US$33 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$23 to C$41 below the futures.

Wheat bids for CPSR were up C$4 per tonne. Prices ranged from C$174 per tonne in southeastern Saskatchewan to C$191 per tonne in southern Alberta.

Average durum prices were up by C$3 to C$5, with bids ranging from C$242 per tonne in northwestern Saskatchewan to C$255 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$5.0725 per bushel on Sept. 12, up 5.25 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 September Kansas City wheat contract was quoted at US$4.0350 per bushel on Sept. 12, up 9.75 cents compared to the previous week.

The September Chicago Board of Trade soft wheat contract settled at US$4.8375 per bushel on Sept. 12, up 17.50 cents on the week.

The Canadian dollar closed at 75.73 U.S. cents on Sept. 12, an increase of 0.13 of a cent from the previous week.

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