Glacier FarmMedia – United States wheat futures hit new contract lows and pressured Western Canadian wheat bids during the week ended Feb. 15.
The U.S. Department of Agriculture reported during its 100th Annual Outlook Forum on Feb. 15 that the average wheat yield is expected to increase to 49.5 bushels per acre in 2024-25 compared to 48.6 this year. Harvested acres in the U.S. are expected to increase by 1.1 million acres at 38.4 million. The carryout estimate was 769 million bushels, compared to 658 million in 2023-24. Cheaper Russian wheat exports also dragged global wheat prices downwards.
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For the week ended Feb. 11, the Canadian Grain Commission reported 571,400 tonnes of wheat exports, the largest volume shipped in 10 weeks. So far in the 2023-24 marketing year, 11.492 million tonnes were shipped, up eight per cent from one year ago.
Canadian Western Red Spring (CWRS) wheat prices were down C$10.20 to C$12.60 per tonne, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Average prices were between C$292.10/tonne in western Manitoba to C$316.40 in southern Alberta.
Quoted basis levels ranged from between C$50 to C$74.30/tonne above the futures when using the grain company methodology of quoting the basis as the difference between the U.S. dollar denominated futures and the Canadian dollar cash bids.
Accounting for exchange rates and adjusting Canadian prices to U.S. dollars (C$1=US$0.7411), CWRS bids were from US$216.50 to US$234.50/tonne. Currency adjusted basis levels ranged from US$7.60 to US$25.60 below the futures. If the futures were converted to Canadian dollars, basis levels would be C$5.60 to C$19 below the futures.
Meanwhile, Canadian Prairie Red Spring (CPRS) prices were down C$10.80 to C$12.10/tonne. The lowest average bid for CPRS was C$248 in southeast Saskatchewan, while the highest average bid was C$272.30 in southern Alberta.
The average prices for Canada Western Amber Durum (CWAD) were C$4.80 to C$8.10 per tonne lower with bids between C$399 in northeast Saskatchewan to C$413.80 in southern Alberta.
The March spring wheat contract in Minneapolis, which most CWRS contracts are based off of, was quoted at US$6.58 per bushel on Feb. 15 and 25.75 U.S. cents higher than the previous week.
The 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 contract was quoted at US$5.7575/bu., down 25.25 U.S. cents.
Both March Minneapolis spring and Kansas City hard red wheat contracts fell to new contract lows.
The March Chicago Board of Trade (CBOT) wheat contract lost 21.5 U.S. cents from the previous week at US$5.67/bu.
The Canadian dollar dropped 0.15 of a U.S. cent to close at 74.11 cents U.S. on Feb. 15.
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.
