Producers Show Patience Marketing Wheat
Despite the smaller crop, cash price data shows buyers are having to work for deliveries. As of week 19, or the week ending Dec. 12, producers have delivered 6.3046 million metric tons (mmt)of wheat (excluding durum). This volume is down 23.6% from the same period in 2020-21 and 23% below the three-year average.
When this is compared to the overall volume of grain available for delivery (July 31 farm stocks plus estimated production), we see cumulative deliveries as of week 19 account for 29.9% of the farm supplies or grain available for delivery, which is only slightly higher than the three-year average of 27.6% delivered over this period. This is despite the sharp decline in 2021 production of 33.6%, which is also 31.2% below the three-year average.
The attached chart shows the trend in the No. 1 CWRS basis for northern Alberta region, based on cash data reported by pdqinfo, with the MGEX future converted to a Canadian dollar value using the spot Canadian dollar. The crop year began with basis at $43.25/mt under the September contract, while on Dec. 20, this was calculated at $5.34/mt under the March contract. This compares to the three-year average of $18.84/bushel under on this date.
Cliff Jamieson can be reached at firstname.lastname@example.org
Follow him on Twitter @Cliff Jamieson
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