Canadian wheat bids decline with U.S. futures, but basis improves

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CNS Canada – Hard red spring wheat bids in Western Canada moved lower during the week ended August 3, as declines in the US futures weighed on prices. However, weakness in the Canadian dollar provided support and helped basis levels see some modest improvement.

Depending on the location, average Canada Western Red Spring (CWRS) wheat prices were down by C$2 to C$4 per tonne across the Prairie provinces, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Average prices ranged from about C$270 per tonne in western Manitoba, to as high as C$284 in eastern Manitoba.

Quoted basis levels varied from location to location, but generally improved by a couple of dollars to range from about $4 to $19 per tonne above the futures when using the grain company methodology of quoting the basis as the difference between the US dollar denominated futures and the Canadian dollar cash bids.

When accounting for currency exchange rates by adjusting Canadian prices to US dollars (C$1=US$0.7950 as of August 3) CWRS bids ranged from US$215 to US$226 per tonne. That would put the currency adjusted basis levels at about US$39 to US$50 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 range from C$49 to C$63 below the futures.

Canada Prairie Red Spring (CPRS) wheat bids were down by C$9 to C$10 per tonne, with prices ranging from C$169 to C$179 per tonne.

Average durum prices were up by C$2 to C$4 per tonne, with bids in Saskatchewan coming in at about C$284 to C$314 per tonne.

The September spring wheat contract in Minneapolis, which most CWRS contracts Canada are based off of, was quoted at US$7.1325 per bushel on August 3, down by 27.25 US cents from the previous week.

The Kansas City hard red winter wheat futures, which are now traded in Chicago, are more closely linked to CPRS in Canada. The September Kansas City wheat contract was quoted at US$4.5975 per bushel on August 3, down by 21.25 US cents compared to the previous week.

The September Chicago Board of Trade soft wheat contract settled at US$4.5775 on August 3, which was down by 23.25 US cents on the week.

The Canadian dollar settled at 70.50 US cents on August 3, which was down by roughly three-quarters of a cent on the week.

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