Weaker loonie underpins Prairie wheat bids

(Country Guide file photo)

CNS Canada — Cash spring wheat and durum bids in Western Canada moved higher during the week ended Monday, as weakness in the Canadian dollar helped underpin basis levels.

Depending on the location, average Canada Western Red Spring (CWRS) wheat prices were up $1-$5 per tonne compared to the previous week. Average prices ranged from about $224 per tonne in Saskatchewan’s southeast, to as high as $238 in the northern and Peace regions of Alberta.

Quoted basis levels varied from location to location, but gained about $2-$4 on average, to range from about $36 to $50 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 currency exchange rates by adjusting Canadian prices to U.S. dollars, CWRS bids ranged from US$167 to US$175 per tonne. That would put the currency adjusted basis levels at about US$13 to US$21 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 $17 to $28 below the futures.

Average durum prices were up by $3-$9 per tonne, with bids in Saskatchewan coming in at about $314-$321, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes).

The December spring wheat contract in Minneapolis, off of which most CWRS contracts in Canada are based, was quoted Monday at US$5.155 per bushel, up about US5.25 cents per bushel from the previous week.

Kansas City hard red winter wheat futures, traded in Chicago, are more closely linked to Canada Prairie Spring Red (CPSR) in Canada. The December K.C. wheat contract was quoted Monday at US$4.045 per bushel, down about seven U.S. cents compared to the previous week.

The December Chicago Board of Trade soft wheat contract settled Monday at US$3.97, down by about US17.25 cents on the week.

The Canadian dollar was trading Monday at US73.8 cents, down by nearly a cent compared to the previous week.

Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow him at @PhilFW on Twitter.

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