MarketsFarm — Despite concerns related to cold weather in the U.S., war in Ukraine and rising numbers of COVID-19 infections in China, most western Canadian wheat bids were lower for the week ended Thursday.
Profit-taking in wheat futures was evident on the Chicago Board of Trade (CBOT), as March contracts for both Kansas City hard red wheat and Minneapolis spring wheat encountered resistance at the US$9 and US$9.50 per bushel levels, respectively.
A large blast of arctic air spread as far south as the Texas Panhandle, posing a threat to already drought-stricken wheat crops in the U.S. southwestern Plains.
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Overseas, Russia continued to launch missiles toward Ukraine and ship insurers planned to cancel war risk coverage on grain vessels shipping from the Black Sea starting on Jan. 1. However, both Russia’s agricultural ministry and research firm SovEcon are projecting the country’s wheat crop to exceed 100 million tonnes, much higher than the U.S. Department of Agriculture’s (USDA) estimate of 91 million. A surging number of COVID cases in China could hinder wheat demand, while Australia gets set to harvest its estimated record crop.
Canada Western Red Spring (CWRS, 13.5 per cent protein) wheat prices declined $7.10-$8 per tonne, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Average prices were between $412.90/tonne in southeastern Saskatchewan and $436.60 in southern Alberta.
Quoted basis levels ranged from $77.10 to $100.70/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.
Accounting for exchange rates and adjusting Canadian prices to U.S. dollars, CWRS bids were from US$304.60 to US$322 per tonne. Currency-adjusted basis levels ranged from US$13.80 to US$31.30 below the futures. If the futures were converted to Canadian dollars, basis levels would be $10.20 to $23.10 below the futures.
Average Canada Prairie Spring Red (CPSR, 11.5 per cent protein) wheat prices were also lower, down $5-$6.60/tonne. The lowest average bid for CPSR was $395.60/tonne in southeastern Saskatchewan, while the highest average bid was $420.30 in southern Alberta.
Meanwhile, average Canada Western Amber Durum (CWAD) prices were mixed, down $2.80 to up $1.10/tonne, with bids ranging from $496.40 in southeastern Saskatchewan to $501.90 in northwestern Saskatchewan.
The March spring wheat contract in Minneapolis, off of which most CWRS contracts in Canada are based, was quoted Thursday at US$9.14 per bushel and 8.25 U.S. cents lower than the previous week.
Kansas City hard red winter wheat futures, traded in Chicago, are more closely linked to CPSR in Canada. The March K.C. wheat contract was quoted at US$8.665/bu., up one-half of a U.S. cent.
The March Chicago Board of Trade wheat contract, meanwhile, gained 11.75 U.S. cents from the previous week at US$7.74/bu. as of Thursday’s close.
The Canadian dollar added 0.53 of a U.S. cent to close at 73.76 U.S. cents on Thursday, pressuring canola prices.
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.
