MarketsFarm – Despite a wide array of factors which would have provided support to prices, Prairie wheat was in the red for the week ended Dec. 30.
With areas already experiencing dry conditions, a large cold snap hit both the Prairie provinces in Canada and the Southern Plains in the United States. For the latter, this raised the threat of winterkill onto the crop with the lack of snow giving little protection. Tensions between Russia and Ukraine, as well as a rise in Russia’s export tax would have also raised prices.
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However, profit-taking reigned supreme and placed downward pressure on prices. Egypt also purchased 300,000 tonnes of wheat from Ukraine, Romania and France with delivery expected in February or March. The Canadian dollar steadily rose against the U.S. greenback during the week, which also brought prices down.
Canada Western Red Spring (13.5 per cent) wheat prices lost C$18.60 to C$21.30 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$441.60 in southeast Saskatchewan to C$463.20 in northern Alberta.
Quoted basis levels ranged from between C$77.30 to C$98.90 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$0.7827), CWRS bids were from US$345.60 to US$362.60 per tonne. Currency adjusted basis levels ranged from US$1.80 to US$18.70 below the futures. If the futures were converted to Canadian dollars, basis levels would be C$1.40 to C$14.60 below the futures.
Average Canadian Prairie Spring Red (11.5 per cent) prices declined C$16.40 to C$18.40 per tonne. The lowest average bid for CPSR wheat was C$404.60 in southwest Saskatchewan, while the highest average bid was C$425.90 in northern Alberta.
Average Canada Western Amber Durum prices dropped C$10 to C$22.70 per tonne with bids ranging from C$732.10 in southern Alberta to C$743.20 in northeast Saskatchewan.
The March spring wheat contract in Minneapolis, which most CWRS contracts Canada are based off of, was quoted at US$9.9150 per bushel on Dec. 30 and 34 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 CPRS in Canada. The March Kansas City wheat contract was quoted at US$8.1275, down 28.75 cents.
The March Chicago Board of Trade wheat contract lost 19.25 cents from the previous week at US$7.7975.
The Canadian dollar gained 0.91 of a cent from the previous week to close at 78.27 U.S. cents on Dec. 30.
