MarketsFarm — New supply data from both sides of the Canada/U.S. border, as well as ongoing drought in wheat growing regions, have supported western Canadian wheat bids for the week ended Thursday.
The U.S. Department of Agriculture released its monthly supply/demand estimates on Wednesday and cut its projected global wheat supply estimate for the 2021-22 marketing year at 278.21 million tonnes, down 1.74 million from January. Despite this, projected U.S. wheat ending stocks rose 20 million bushels to 648 million.
One day earlier, Statistics Canada reported total stocks of wheat were at 15.6 million tonnes on Dec. 31, 2021, 38 per cent less than the year before.
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Drought in the southern and southwestern U.S. Plains continues to worsen as the area of U.S. hard red wheat in drought conditions increased to 71 per cent, according to the U.S. Drought Monitor. North Africa is also struggling with dry conditions.
Canada Western Red Spring (CWRS, 13.5 per cent protein) wheat prices jumped $18.90-$20.40 per tonne, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Average prices were between $425.30 in southeastern Saskatchewan to $447 in northern Alberta.
Quoted basis levels ranged from between $79.10 and $100.80 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 ranged from US$335.40 to US$352.50 per tonne. Currency-adjusted basis levels ranged from US$10.90 below the futures to US$6.30 above the futures. If the futures were converted to Canadian dollars, basis levels would be $8.60 below the futures to $4.90 above the futures.
Average Canada Prairie Spring Red (CPSR, 11.5 per cent protein) prices rose $16.50-$17.60 per tonne. The lowest average bid for CPSR wheat was $390.10 in southeastern Saskatchewan, while the highest average bid was $410.80 in northern Alberta.
Meanwhile, average Canada Western Amber Durum prices fell $65-$88.80 per tonne with bids ranging from $575.20 in southwestern Saskatchewan to $582.70 in northeastern Saskatchewan.
The March spring wheat contract in Minneapolis, off of which most CWRS contracts in Canada are based, was quoted Thursday at US$9.4225 per bushel, 41.5 U.S. cents higher 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 Thursday at US$8.01, up 32 U.S. cents.
The March Chicago Board of Trade wheat contract gained 19.75 U.S. cents from the previous week, ending Thursday at US$7.715.
The Canadian dollar was flat, losing 0.02 U.S. cent from the previous week to close Thursday at 78.85 U.S. cents.
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.
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