Prairie cash wheat: Stronger crop prospects, loonie lower bids

MarketsFarm — The U.S. Department of Agriculture’s projected increases for domestic and worldwide wheat ending stocks, along with a strengthening Canadian dollar, brought pressure onto western Canadian wheat bids for the week ended Thursday.

In its monthly world agricultural supply and demand estimates (WASDE) report on Wednesday, USDA showed a projected 1.78 million-tonne rise in global wheat ending stocks, as well as an 810,000-tonne increase in the U.S. The rise stateside stems from an 840,000-tonne increase in hard red winter wheat ending stocks.

The Canadian dollar also closed the week above 80 U.S. cents for the first time since November 2021, sending bids downward.

Canada Western Red Spring (CWRS, 13.5 per cent protein) wheat prices lost $14.50-$19.30 per tonne, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Average prices were between $394.90 in southeastern Saskatchewan and $419.40 in southern Alberta.

Quoted basis levels ranged $65.80-$90.40 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$316.30 to US$335.90 per tonne. Currency-adjusted basis levels ranged from US$12.70 below the futures to US$6.90 above the futures. If the futures were converted to Canadian dollars, basis levels would be $10.20 below to $5.50 above the futures.

Average Canada Prairie Spring Red (CPSR, 11.5 per cent protein) prices declined $10.90-$21.10 per tonne. The lowest average bid for CPSR wheat was $369.70 in southwestern Saskatchewan, while the highest average bid was $390.80 in southern Alberta.

Meanwhile, average Canada Western Amber Durum prices decreased $10.50-$18.90 per tonne with bids ranging from $726.20 in southern Alberta to $734.40 in western Manitoba.

The March spring wheat contract in Minneapolis, off of which most CWRS contracts in Canada are based, was quoted Thursday at US$8.955 per bushel, 28.25 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 March K.C. wheat contract was quoted at US$7.5975, down 8.75 U.S. cents.

The March Chicago Board of Trade wheat contract gained 0.75 U.S. cent from the previous week, closing Thursday at US$7.4675.

The Canadian dollar gained 1.61 U.S. cents from the previous week to close Thursday at 80.1 U.S. cents.

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.