Prairie HRS Basis Signals Demand


Exports tend to be weighted to the latter months of the crop year. At the same time, there are signals that bears watching. Agriculture and Agri-Food Canada reduced its forecast for 2020-21 wheat exports by 50,000 metric tons this month to 21.050 million metric tons. As well, the West Coast Vessel lineup has fallen for the sixth time in seven weeks to a total of 23 vessels (Vancouver plus Prince Rupert), below the one-year average of 30 vessels per week.

Cash prices for No. 1 CWRS 13.5% across the nine regions of the Prairies as reported by pdqinfo on April 20 ranged from $286.23/mt to $307.31/mt, with all nine regions reaching the highest levels reported since the summer months of 2017. Across the nine regions, cash bids on Tuesday ranged from $29.89/mt to $45.03/mt below 2017 highs, averaging $36.14/mt, or close to $1/bushel below these highs.

Basis levels have shown some weakness in recent trade. While not shown, data for the Northern Alberta region shows the Canadian dollar basis as strong as $4.30/mt over the future as recent as April 7, while reported at $2.86/mt under the nearby May future on April 20, the strongest seen across the nine regions. At the same time, the attached chart shows this compares to the three-year average of $23.76/mt under the nearby contract for this date.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Follow him on Twitter @Cliff Jamieson



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