Prairie Wheat Weekly: Weaker loonie generates increases

Glacier FarmMedia—There were small to modest gains in wheat prices on the Canadian Prairies for the week ended Apr. 18. Canadian Western Red Spring Wheat, Canada Prairie Red Spring Wheat, and Canadian Western Amber Durum made advances despite losses in the United States wheat complex.

While Minneapolis and Kansas City wheat eased back, Chicago wheat was down hard. However, support for Canadian prices came from a weaker dollar relative to its United States counterpart.

Average CWRS (13.5%) prices rose C$2.90 to C$4.00 per tonne, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Those prices ranged from about C$299.50 per tonne in southeastern Saskatchewan to C$320.10 per tonne in southern Alberta.

Quoted basis levels varied from location to location and ranged from C$63.30 to C$83.80 per tonne above the futures when using the grain company methodology of quoting the basis as the difference between the U.S. dollar denominated futures and the Canadian dollar cash bids.

When accounting for currency exchange rates by adjusting Canadian prices to United States dollars (C$1=US$0.7265), CWRS bids ranged from US$217.60 to US$232.50 per tonne. That would put the currency adjusted basis levels at about US$3.70 to US$18.70 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 ranged from C$2.70 to C$13.60 below the futures.

Average CPRS (11.5%) wheat gained 10 cents to C$2.40 per tonne. Bids ranged from C$270.20 per tonne in southeastern Saskatchewan to C$293.20 per tonne in southern Alberta.

Average CWAD prices added C$2.70 to C$4.50 per tonne. Bids ranged from C$393.70 per tonne in northwestern Saskatchewan to C$402.80 per tonne in western Manitoba.

The July spring wheat contract in Minneapolis, which most CWRS contracts Canada are based off of, was quoted at US$6.4300 per bushel on Apr. 18, giving up 2.25 cents on the week.

The Kansas City hard red winter wheat futures, which are now traded in Chicago, are more closely linked to CPRS in Canada. The July Kansas City wheat contract was quoted at US$5.7525 per bushel on Apr. 18, down 3.25 cents compared to a week ago.

The July Chicago Board of Trade soft wheat contract settled at US$5.5300 per bushel on Apr. 18, dropping 13.25 cents.

The Canadian dollar closed Apr. 18 at 72.65 U.S. cents, losing almost four-tenths of a cent.

— Glen Hallick reports for MarketsFarm from Winnipeg.