MarketsFarm — Dry weather for most of the Prairies, as well as rising wheat prices in the U.S., lifted western Canadian wheat bids, some to more than $400 per tonne, for the week ended July 6.
With the exception of thunderstorms and sporadic precipitation in Alberta, dryness persisted across much of the Prairies, albeit with milder temperatures in the low- to mid-20s C range. Dry weather is expected to continue for the region into the coming week.
The U.S. Department of Agriculture (USDA) on June 30 released its June acreage and quarterly grain stocks reports, which provided support for wheat. Wheat acres were estimated at 49.628 million, up nine per cent from 2022 but also 227,000 acres less than March intentions. Quarterly grain stocks were 17 per cent lower than last year at 581 million bushels, 31 million below the average pre-report trade estimate. However, wheat prices were also pressured by falling corn prices and rains in growing areas.
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Germany’s winter wheat crop is expected to decline seven per cent compared to 2022 at 20.59 million tonnes, according to the country’s farmers’ association, due to hot and dry conditions. Agritel raised its estimate for Russian wheat production by 2.5 million tonnes to 85.7 million due to favourable weather in central and southern regions of the country. Russia’s government also reiterated it will not extend the Black Sea Grain Initiative past its July 17 deadline.
Canada Western Red Spring (CWRS) prices added $15.90-$20.50 per tonne, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Average prices were between $382.60/tonne in southeastern Saskatchewan and $400.70 in southern Alberta.
Quoted basis levels ranged between $68.90 and $87/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$286.70 to US$300.20/tonne. Currency-adjusted basis levels ranged from US$13.50 to US$27 below the futures. If the futures were converted to Canadian dollars, basis levels would be $10.10 to $20.30 below the futures.
Meanwhile, Canada Prairie Spring Red (CPSR) prices also increased, up $13.80-$24/tonne. The lowest average bid for CPSR wheat was $358.20/tonne in southeastern Saskatchewan, while the highest average bid was $380.30 in southern Alberta.
Average prices for Canada Western Amber Durum (CWAD) were between 80 cents and $5.20 per tonne higher with bids between $373.20 in southern Alberta and $397.20 in western Manitoba.
The September spring wheat contract in Minneapolis, off of which most CWRS contracts in Canada are based, was quoted at US$8.58 per bushel on July 6 and 32.5 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 September Kansas City wheat contract was quoted at US$8.4375/bu., up 43.75 U.S. cents.
The September Chicago Board of Trade (CBOT) wheat contract lost 9.5 U.S. cents from the previous week, closing July 6 at US$6.58/bu.
The Canadian dollar was weaker, losing 0.52 U.S. cent to close at 74.92 U.S. cents on July 6.
— Adam Peleshaty reports for MarketsFarm from Winnipeg.
