Canada Markets

The attached chart shows the relationship between DTN's spring wheat and durum cash indices, including the March 20 close of $5.38 USD for spring wheat and $4.72/bushel USD for durum, for a spread of $.66/bu., as seen in the lower study. This is the first time in five years where spring wheat is trading at a premium to durum on this day (March 20), with spring wheat shown at a $0.51 premium on March 20 2014. This spread has seen spring wheat consistently trade higher since the Aug. 1 Canadian crop year began, with the current spread of $.66/bu. close to the $0.63 spread average over this entire period.

In seeded acre data for both the United States and Canada since 2013-14, this spread, whether positive or negative, explained the year-over-year percent change in seeded acres for spring wheat and durum in three of the five years; 2019 will be another of those years.

The March Agriculture and Agri-Food Canada supply and demand estimates suggest the current environment favoring spring wheat will lead to an 8.7% year-over-year increase in spring wheat acres while durum acres are forecast to be pared by 20%. Such a move is also supported by ending stocks of wheat that are forecast to fall to 4 million metric tons, or to 15% of total 2018-19 disappearance, while ending stocks of durum are expected to rise to 2 mmt, or a bearish 38.6% of disappearance.

The USDA's Prospective Plantings report will be released on March 29, while Statistics Canada will release official planting estimates for Canada's principal field crops on April 26.

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DTN 360 Poll

This week's poll asks how long you think that Canada's canola trade dispute with China will last. You can share your thoughts on this week's poll, on the lower-right side of your DTN Canada Home Page.

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

Follow him on Twitter @Cliff Jamieson

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