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Canadian wheat decline with U.S. futures, rising loonie

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CNS Canada – Hard red spring wheat bids in Western Canada lost ground during the week ended July 28, as declines in the US futures and strength in the Canadian dollar both weighed on prices.

Depending on the location, average Canada Western Red Spring (CWRS) wheat prices were down by C$8 to C$11 per tonne across the Prairie provinces, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Average prices ranged from about C$274 per tonne in western Manitoba, to as high as C$288 in eastern Manitoba.

Quoted basis levels varied from location to location, but generally held steady to range from about $2 to $16 per tonne above the futures when using the grain company methodology of quoting the basis as the difference between the US dollar denominated futures and the Canadian dollar cash bids.

When accounting for currency exchange rates by adjusting Canadian prices to US dollars (C$1=US$0.8034 as of July 28) CWRS bids ranged from US$220 to US$231 per tonne. That would put the currency adjusted basis levels at about US$41 to US$52 below the futures.

Looking at it the other way around, if the Minneapolis futures are converted to Canadian dollars, CWRS basis levels across Western Canada range from C$51 to C$65 below the futures.

Canada Prairie Red Spring (CPRS) wheat bids were down by C$13 to C$17 per tonne, with prices ranging from C$177 to C$188 per tonne.

Average durum prices were up by C$2 to C$5 per tonne, with bids in Saskatchewan coming in at about C$286 to C$316 per tonne.

The September spring wheat contract in Minneapolis, which most CWRS contracts Canada are based off of, was quoted at US$7.4050 per bushel on July 28, down by 25.25 US cents from the previous week.

The Kansas City hard red winter wheat futures, which are now traded in Chicago, are more closely linked to CPRS in Canada. The September Kansas City wheat contract was quoted at US$4.8100 per bushel on July 28, down by 15.00 US cents compared to the previous week.

The September Chicago Board of Trade soft wheat contract settled at US$4.8100 on July 28, which was down by 18.25 US cents on the week.

The Canadian dollar settled at 80.34 US cents on July 28, which was up by roughly two-thirds of a cent on the week.

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