Prairie cash wheat: Bids surge on U.S. gains, weaker loonie

MarketsFarm — Wheat bids in Western Canada were significantly higher for the week ended Thursday on gains in U.S. markets coupled with a weaker Canadian dollar.

Canada Prairie Spring Red (CPSR) wheat saw the largest increases, with bids up by more than $20 per tonne. Increases for Canada Western Red Spring (CWRS) wheat were in the teens, while those for Canada Western Amber Durum (CWAD) remained under $10 per tonne.

Average CWRS (13.5 per cent protein) wheat prices were up $13-$15 per tonne, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Average prices ranged from about $234 per tonne in northeastern Saskatchewan to as high as $253 per tonne in southern Alberta.

Quoted basis levels varied from location to location and ranged from $43 to $62 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$162 to US$174 per tonne. That would put the currency-adjusted basis levels at about US$17-$29 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 $12 to $20 below the futures.

Bids for CPSR ranged from $209 per tonne in northeastern Saskatchewan to $225 per tonne in southern Alberta.

Average durum prices were higher, with bids ranging from $277 per tonne in northwestern Saskatchewan to $296 per tonne in western Manitoba.

The May spring wheat contract in Minneapolis, off of which most CWRS contracts Canada are based, was quoted Thursday at US$5.1975 per bushel, rising 10.75 cents from the previous week.

Kansas City hard red winter wheat futures, traded in Chicago, are more closely linked to CPSR in Canada. The May K.C. wheat contract was quoted Thursday at US$4.655 per bushel, vaulting 32.75 cents compared to the previous week.

The May Chicago Board of Trade soft wheat contract settled Thursday at US$5.35 per bushel, jumping 29.5 cents on the week.

The Canadian dollar closed Thursday at 68.99 U.S. cents, after losing 3.37 cents on the week. The loonie lost ground on the crude oil price war between Saudi Arabia and Russia, and on the negative impacts on global markets from the COVID-19 pandemic.

— Glen Hallick reports for MarketsFarm from Winnipeg.