Glacier FarmMedia COVID-19 & the Farm

Prairie cash wheat: Bids mixed as loonie jumps

mgex may wheat
MGEX May 2021 wheat (candlesticks) with K.C. May 2021 wheat (orange line), CBOT May 2021 wheat (red line) and Canadian dollar in U.S. cents (green line). (Barchart)

MarketsFarm — Bids for Canada Western Red Spring (CWRS) and Canada Western Amber Durum (CWAD) wheats dropped while those for Canada Prairie Spring Red (CPSR) wheat made their way upward during the week ending Wednesday.

Wheat futures in the U.S. were mixed, while the Canadian dollar rose. The market reacted to both the prospective plantings report and the grain stocks report released Wednesday from the U.S. Department of Agriculture (USDA).

The plantings report showed wheat acres are expected to rise during the 2021-22 crop year, but prices caught spillover from soybeans and corn, where futures rose limit-up on the same day on underwhelming seeding numbers.

CWRS (13.5 per cent protein) prices decreased by between 40 cents and $6 per tonne, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Average prices were between $260.70 in western Manitoba and $282.90 in northern Alberta.

Quoted basis levels were varied, ranging from $36.25 to $58.50 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$207.30 to US$224.90 per tonne. Currency-adjusted basis levels ranged from 50 U.S. cents above to US$17.10 below the futures. If the futures were converted to Canadian dollars, basis levels would be 40 cents above to $13.60 below the futures.

Average CPSR (11.5 per cent protein) wheat prices went in the other direction, moving up by between 30 cents and $2.10 per tonne. The lowest average bid was $245 in southeastern Saskatchewan, while the highest average bid was $262.70 in southern Alberta.

Average durum prices dropped $1.10-$2.20 per tonne with bids ranging from $301.50 in northeastern Saskatchewan to $312.75 in southern Alberta.

The May spring wheat contract in Minneapolis, off of which most CWRS contracts in Canada are based, was quoted Wednesday at US$6.1075 per bushel, 6.75 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 May K.C. wheat contract was quoted Wednesday at US$5.7575, up nine U.S. cents on the week.

The May Chicago Board of Trade (CBOT) wheat contract on Wednesday was up 5.5 U.S. cents from the previous week at US$6.18.

The Canadian dollar gained 0.19 U.S. cent from the previous week to close Wednesday at 79.52 U.S. cents.

— Adam Peleshaty reports for MarketsFarm from Winnipeg.

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