MarketsFarm — The prospect of Russia allowing food shipments to leave Ukraine — albeit with a few concessions — was the key factor in declining bids for western Canadian wheat during the week ended Thursday.
Russian Deputy Foreign Minister Andrei Rudenko on Wednesday said his country is ready to provide a humanitarian corridor in the Black Sea to allow vessels carrying food, including wheat, to leave Ukraine. In order for that to happen, Rudenko added, international sanctions placed on Russian exports and financial institutions would have to be lifted amongst other conditions.
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Alberta crop conditions improve: report
Varied precipitation and warm temperatures were generally beneficial for crop development across Alberta during the week ended July 8, according to the latest provincial crop report released July 11.
Underlying support on wheat prices came from delayed planting progress in the Canadian Prairies and U.S. northern Plains, as well as poor conditions for wheat in the U.S. southern Plains and France.
Canada Western Red Spring (CWRS, 13.5 per cent protein) wheat prices lost $18.50-$21.50 per tonne, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Average prices were between $550.20 in southeastern Saskatchewan and $566.60 in eastern Manitoba.
Quoted basis levels ranged from between $60.30 to $76.60 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.
Accounting for exchange rates and adjusting Canadian prices to U.S. dollars, CWRS bids were from US$430.10 to US$442.90 per tonne. Currency-adjusted basis levels ranged from US$47.10 to US$59.90 below the futures. If the futures were converted to Canadian dollars, basis levels would be $36.80-$46.80 below the futures.
Average Canada Prairie Spring Red (CPSR, 11.5 per cent protein) prices dropped $27.90-$30.50 per tonne. The lowest average bid for CPSR wheat was $519.90 in southeastern Saskatchewan, while the highest average bid was $532.80 in northern Alberta.
Meanwhile, average Canada Western Amber Durum prices were up $1.70-$8.40 per tonne with bids ranging from $565.10 in southern Alberta to $599.90 in northeastern Saskatchewan.
The July spring wheat contract in Minneapolis, off of which most CWRS contracts in Canada are based, was quoted at US$12.9225 per bushel on Thursday, 38.25 U.S. cents lower than the previous week.
Kansas City hard red winter wheat futures, traded in Chicago, are more closely linked to CPSR in Canada. July K.C. wheat contract was quoted Thursday at US$12.285, down 66.75 U.S. cents.
The July Chicago Board of Trade wheat contract decreased 57.25 U.S. cents from the previous week at US$11.4325 on Thursday.
The Canadian dollar gained 0.10 U.S. cent from the previous week to close at 78.17 U.S. cents on Thursday.
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.
