MarketsFarm — Despite bullish factors affecting wheat futures on the Chicago Board of Trade (CBOT), western Canadian wheat bids did not see much change during the week ended Thursday.
Futures prices for all three major U.S. varieties increased week-by-week, mostly fuelled by large gains on Feb. 10, as traders shifted focus to Russia’s invasion of Ukraine. On that day, Russian missiles flew over Moldovan air space to hit Ukrainian targets and more launches were made during the weekend. Russia also refused Ukraine’s request to increase the minimum tonnage on its ships, amidst the latter’s accusations that Russia is slowing down inspections of Ukrainian grain vessels on the Black Sea.
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Precipitation over the U.S. southern Plains during the week was not enough to reverse drought conditions and largely avoided hard red wheat-growing areas. The U.S. is expected to have its lowest wheat carryout in 15 years.
Meanwhile, Canadian wheat exports have totalled 10.64 million tonnes so far this crop year, nearing its total for the entire 2021-22 marketing year and putting it on track to match totals in 2018-19 and 2020-21, according to the Canadian Grain Commission (CGC).
The International Grains Council (IGC) released its monthly supply/demand estimates on Thursday, with world wheat production held steady at 796 million tonnes. Global wheat consumption remained at 789 million tonnes, while ending stocks increased one million to 282 million.
CWRS (Canada Western Red Spring) prices were slightly higher, gaining $3.90-$7.40 per tonne, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Average prices were between $412.20/tonne in northeastern Saskatchewan and $433 in southern Alberta.
Quoted basis levels ranged from $72.80 to $93.50/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.
Accounting for exchange rates and adjusting Canadian prices to U.S. dollars, CWRS bids were from US$306.70 to US$322.20/tonne. Currency-adjusted basis levels ranged from US$17.30 to US$32.70 below the futures. If the futures were converted to Canadian dollars, basis levels would be $12.80-$24.30 below the futures.
Meanwhile, CPSR (Canada Prairie Spring Red) prices were mixed, down $4.90 to up $6/tonne. The lowest average bid for CPSR wheat was $396.40/tonne in southeastern Saskatchewan, while the highest average bid was $415.30 in southern Alberta.
Average durum (CWAD) prices added $5.80-$11.60/tonne, with bids ranging from $449 in northeastern Saskatchewan to $463.20 in southern Alberta.
The March spring wheat contract in Minneapolis, off of which most CWRS contracts in Canada are based, was quoted Thursday at US$9.3025 per bushel, 13 U.S. cents higher than 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 Thursday at US$8.985/bu., up 19.5 U.S. cents.
The March CBOT wheat contract gained 7.75 U.S. cents from the previous week, closing at US$7.65/bu. on Thursday.
The Canadian dollar was mostly steady, reversing 0.07 of a U.S. cent to close at 74.41 U.S. cents U.S. on Thursday.
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.
