MarketsFarm – Red spring wheat bids in Western Canada were down, while durum prices were mixed during the week ended May 25, after the release of bearish data.
On May 23, Agriculture and Agri-Food Canada (AAFC) presented its monthly principal field crop report, which estimated 2023-24 wheat production (including durum) at 35.75 million tonnes.
This is an increase of 5.7 per cent from the previous year, as well as 45.7 per cent gain in carryout to 5.8 million tonnes. For durum wheat, production was set to increase 6.9 per cent to 5.82 million tonnes while carryout was estimated at 800,000 tonnes, 66.7 per cent more than in 2022-23.
Read Also
Alberta crop conditions improve: report
Varied precipitation and warm temperatures were generally beneficial for crop development across Alberta during the week ended July 8, according to the latest provincial crop report released July 11.
Healthy amounts of rain fell on hard red winter wheat growing areas in the United States, which some traders believe will improve conditions on an already drought-ravaged crop.
While Ukraine accused Russia of slowing down grain inspections on the Black Sea, the latter’s crop is largely responsible for an influx of cheaper wheat on the market. As a result, all three major U.S. wheat varieties saw price declines in the futures market.
Canada Western Red Spring (CWRS) prices declined C$6.20 to C$8.30 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$363/tonne in southeast Saskatchewan to C$383.10 in northern Alberta.
Quoted basis levels ranged from between C$67 to C$87.10/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.
Accounting for exchange rates and adjusting Canadian prices to U.S. dollars (C$1=US$0.7338), CWRS bids were from US$266.40 to US$281.10/tonne. Currency adjusted basis levels ranged from US$14.90 to US$29.60 below the futures. If the futures were converted to Canadian dollars, basis levels would be C$10.90 to C$21.70 below the futures.
Meanwhile, Canada Prairie Spring Red (CPSR) prices fell further, down C$13.30 to $16/tonne. The lowest average bid for CPSR wheat was C$346/tonne in southeast Saskatchewan, while the highest average bid was C$366.80 in southern Alberta.
The average prices for Canada Western Amber Durum (CWAD) were down C$2.10 to up C$2.40 per tonne with bids between C$400.10 in northeast Saskatchewan to C$405.20 in northwest Saskatchewan.
The July spring wheat contract in Minneapolis, which most CWRS contracts Canada are based off of, was quoted at US$8.055 per bushel on May 25 and 23 U.S. 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 CPSR in Canada. The July Kansas City wheat contract was quoted at US$8.18/bu., down 39 U.S. cents.
The July Chicago Board of Trade (CBOT) wheat contract lost 7.5 U.S. cents from the previous week at US$6.0425/bu.
The Canadian dollar was weaker, losing 0.69 of a U.S. cent to close at 73.38 cents U.S. on May 25.
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man
