Cash bids for spring wheat in Western Canada were sharply higher, following a rally seen in U.S. futures markets. However, the gains were capped by harvest pressure, good yield reports and large supply expectations.
Average spot bids for Canada Western red spring (CWRS) wheat (13.5 per cent protein) on Monday across Manitoba, Saskatchewan and Alberta came in at around C$229 per tonne ($6.23 per bushel) based on pricing available from a cross-section of delivery points, which compares to $218 per tonne ($5.94/bu.) the week prior.
Basis levels were at an average discount of $39 relative to the futures, unchanged from the previous week.
Average Canada Prairie spring red (CPSR) wheat values were at C$212 per tonne ($5.78/bu.) on Monday, up from $200 per tonne ($5.45/bu.) a week ago. Average basis levels widened to a discount of $59 compared to futures, from $56 the week prior.
U.S. wheat futures were sharply higher, with a short-covering rally behind some of the strength. Strong export and commercial demand further underpinned US wheat futures.
The December spring wheat contract in Minneapolis, off of which most CWRS contracts in Canada are based, was quoted at US$7.2875/bu. on Monday, up 30 cents per bushel from the previous week.
Kansas City hard red winter wheat futures, which are now traded in Chicago, are more closely linked to CPSR in Canada. The December KCBT wheat contract gained 41.75 cents over the week to finish at US$7.395/bu. on Monday.
Durum prices moved lower, undermined by continued harvest pressure and expectations of a very large Canadian crop. Average spot bids were down by $6 per tonne from the week prior at C$212 per tonne ($5.78/bu.).
— Terryn Shiells writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.