Prairie wheat bids down with U.S. futures

Western Canadian wheat cash bids moved lower during the week ended Monday, following losses seen in the U.S. futures markets.

Basis levels also widened for both Canada Western Red Spring (CWRS) and Canadian Prairie Spring Red (CPSR) varieties, which contributed to the price weakness.

Average spot bids for CWRS (13.5 per cent protein) across Manitoba, Saskatchewan and Alberta came in at around $178 per tonne, or $4.85 per bushel, based on pricing available from a cross-section of delivery points, which compares to $192 per tonne ($5.21/bu.) the week prior. Basis levels were wider at a discount of $62 relative to the futures, from $51 the week prior.

Average CPRS values were at $157 per tonne ($4.27/bu.), down from $171 per tonne ($4.66/bu.) a week ago. Average basis levels were widened to a discount of $88 compared to futures, from $85 the week prior.

U.S. wheat futures were sharply lower, as the large global supply situation continued to overhang prices. A bearish Dec. 10 USDA report, which showed an unexpected increase in global wheat ending stocks for 2013-14, was also responsible for the downward price slide. A lack of fresh export demand for U.S. wheat further undermined the futures.

The March spring wheat contract in Minneapolis, off of which most CWRS contracts in Canada are based, was quoted at US$6.5425/bu. on Monday, down 22.5 cents 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 March Kansas City wheat lost 30.5 cents over the week, settling Monday at US$6.655/bu.

Durum prices moved lower in reaction to the large global supply situation and logistical problems in moving the Canadian crop. Average spot bids decreased by $10 to $189 per tonne, or $5.14 per bushel.

– Terryn Shiells writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.