Western Canadian wheat: Bids surge on U.S. gains, weaker loonie

WINNIPEG, (MarketsFarm) – Wheat bids in Western Canada were significantly higher for the week ended March 19, due to gains made in the United States markets coupled with a weaker Canadian dollar.

Canada Prairie Red Spring (CPRS) saw the largest increases, with bids up by more than C$20 per tonne. Increases for Canadian Western Red Spring Wheat (CWRS) were in the teens, while those for Canadian Western Amber Durum (CWAD) remained under C$10 per tonne.

Average CWRS (13.5 percent) wheat prices were up C$13 to C$15 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$234 per tonne in northeastern Saskatchewan, to as high as C$253 per tonne in southern Alberta.

Quoted basis levels varied from location to location and ranged from $43 to $62 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$0.6899) CWRS bids ranged from US$162 to US$174 per tonne. That would put the currency adjusted basis levels at about US$17 to US$29 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$12 to C$20 below the futures.

Bids for CPSR wheat ranged from C$209 per tonne in northeastern Saskatchewan to C$225 per tonne in southern Alberta.

Average durum prices were higher, with bids ranging from C$277 per tonne in northwestern Saskatchewan to C$296 per tonne in western Manitoba.

The May spring wheat contract in Minneapolis, which most CWRS contracts Canada are based off of, was quoted at US$5.1975 per bushel on March 19, rising 10.75 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$4.6550 per bushel on March 19, vaulting 32.75 cents compared to the previous week.

The May Chicago Board of Trade soft wheat contract settled at US$5.35 per bushel on March 19, jumping 29.50 cents on the week.

The Canadian dollar closed at 68.99 U.S. cents on March 19, after losing 3.37 cents on the week. The loonie lost ground due to the crude oil price war between Saudi Arabia and Russia, as well as the negative impact the COVID-19 pandemic is having on global markets.

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