Falling loonie boosts Prairie spring wheat bids

(Country Guide file photo)

CNS Canada — Cash spring wheat bids across Western Canada moved higher during the week ended Friday, as declines in the Canadian dollar helped basis levels improve.

Average Canada Western Red Spring (CWRS) wheat prices were steady to as much as C$5 per tonne higher over the week, according to price quotes from a cross-section of delivery points across the Prairie provinces compiled by PDQ. Average prices ranged from about C$231 per tonne in southeastern Saskatchewan to as high as $242 in southern Alberta.

Quoted basis levels varied from location to location, but were generally sitting at C$49-$65 per tonne 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.

When accounting for the currency exchange rates by adjusting Canadian prices to U.S. dollars, CWRS bids ranged from US$159 to $166 per tonne. That would put the currency-adjusted basis levels at about US$16-$23 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$23 to $33 below the futures.

Average Canada Prairie Spring Red (CPSR) bids were up by C$1-$6 per tonne. Average CPSR prices came in at about C$190 per tonne in Manitoba, $189-$206 per tonne in Saskatchewan, and $207 to $211 per tonne in Alberta.

Average durum prices were narrowly mixed during the week, holding relatively steady overall. Bids in southern Saskatchewan, where the bulk of the crop is grown, were up a dollar to down a dollar, to sit in the C$317-$318 per tonne area.

The March spring wheat contract in Minneapolis, off of which most CWRS contracts in Canada are based, was quoted at US$4.9725 per bushel on Friday, down US3.75 cents from 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$4.74 per bushel on Friday, up US1.25 cents compared to the previous week.

The March Chicago Board of Trade (CBOT) soft wheat contract settled Friday at US$4.7375, US4.75 cents lower compared to one week earlier.

The Canadian dollar closed Friday at US68.82 cents, down by nearly two cents relative to its U.S. counterpart compared to Jan. 8.

Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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