MarketsFarm — Spring wheat bids in Western Canada dropped sharply lower during the week ended Thursday, as losses in U.S. futures weighed on values.
Increased grain movement out of Ukraine, as more vessels were finally shipping corn and wheat out of Black Sea ports, contributed to the selling pressure in the futures that spilled into the Canadian cash market. Global recessionary fears were also bearish, although resulting weakness in the Canadian dollar did lend some support.
Average Canada Western Red Spring (CWRS, 13.5 per cent protein) wheat prices were down by $24.80-C$27.80 per tonne during the week ended Thursday, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Average prices ranged from about $365.30 per tonne in southeastern Saskatchewan to as high as $384.20 per tonne in northern Alberta.
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Quoted basis levels varied from location to location and ranged from $52.20 to $71 per tonne above the futures when using the grain company methodology of quoting the basis as the difference between U.S. dollar-denominated futures and Canadian dollar cash bids.
When accounting for currency exchange rates by adjusting everything into Canadian dollars, CWRS basis levels ranged from $12.40 to $23.60 below the futures.
Canada Prairie Spring Red (CPSR) wheat bids were down by $28.50-$28.80 per tonne, with prices ranging from $330.80 to $343.20 per tonne.
Average durum prices were lower, losing $10.30-$20.50 per tonne. Bids ranged from $421.80 to $431.20 per tonne.
Spring wheat futures in Minneapolis were down by 69 U.S. cents per bushel in the September contract, settling Thursday at US$8.5275 per bushel.
Kansas City hard red winter wheat futures, traded in Chicago, are more closely linked to CPSR in Canada. The September K.C. wheat contract was quoted at US$8.125 per bushel on Thursday, down by 76.75 U.S. cents per bushel compared to the previous week.
The September Chicago Board of Trade soft wheat contract settled Thursday at US$7.315 per bushel, down by 79.25 U.S. cents on the week.
The Canadian dollar closed at 77.35 U.S. cents Thursday, down by just over a cent relative to its U.S. counterpart on the week.
— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.
