MarketsFarm — Despite adverse weather conditions in both Canada and the U.S., as well as poor growing conditions south of the border, western Canadian wheat bids saw slight increases for the week ended Thursday.
A spring snowstorm descended on eastern Saskatchewan, western Manitoba and North Dakota on Wednesday and Thursday, with some parts seeing up to 40 centimetres of snow. While the added moisture will help alleviate dry conditions in some areas, it will certainly delay spring wheat seeding.
The U.S. Department of Agriculture (USDA) rated that country’s national winter wheat crop at 27 per cent good to excellent as of Apr. 16 — unchanged from the previous week, but still the lowest rating in decades. The crop was also rated 39 per cent poor to very poor. Precipitation is expected in the drought-stricken U.S. southern Plains, but it likely will not improve crop conditions.
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After two days of discussions between Ukraine and Russia, inspections of Ukrainian grain vessels at Turkey’s Bosphorus Strait resumed Wednesday following a brief halt. The Black Sea Grain Initiative is set to expire May 18 with no signs yet of renewal. Ukraine and Poland also reached an agreement to allow the former’s grain to be transported through the latter. The European Union is also planning on restricting Ukrainian grain imports and providing compensation to neighbouring countries totalling 100 million euros (C$148.8 million).
Canada Western Red Spring (CWRS) wheat prices added $3-$6.10 per tonne, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Average prices were between $376.10/tonne in southeastern Saskatchewan and $397.10 in southern Alberta.
Quoted basis levels ranged between $61.60 and $82.70/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$279.20 to US$294.80/tonne. Currency-adjusted basis levels ranged from US$19.60 to US$35.30 below the futures. If the futures were converted to Canadian dollars, basis levels would be $14.60-$26.20 below the futures.
Meanwhile, Canada Prairie Spring Red (CPSR) wheat prices were also higher, up $3.50-$5.70/tonne. The lowest average bid for CPSR was $358.10/tonne in southeastern Saskatchewan, while the highest average bid was $380.70 in southern Alberta.
Average durum prices declined $2-$7.50 per tonne with bids between $430.20 in northeastern Saskatchewan and $445.50 in southern Alberta.
The May spring wheat contract in Minneapolis, off of which most CWRS contracts in Canada are based, was quoted at US$8.5575 per bushel on Thursday and 6.25 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 May K.C. wheat contract was quoted at US$8.4025/bu., down five U.S. cents.
The Chicago May wheat contract on Thursday was up 0.75 U.S. cent from the previous week, at US$6.6775/bu.
The Canadian dollar was weaker, dipping 0.62 U.S. cent to close Thursday at 74.24 U.S. cents.
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.
