Canada Markets

Bids for cash spring wheat at Pacific Northwest terminals have fallen substantially following the move lower in Minneapolis futures, although the August 16 report shows a week-over-week move higher for the first time in 13 weeks. The mid-point of the cash bids reported for 13% protein DNS was $8.28/bu. U.S., or approximately $313.62 per metric tonne CDN as of August 15. The premium for 14% protein was 18 cents/bu. US, or $6.82/mt, with no additional premium for 15% protein, just as has been the situation for almost all of 2012/13.

The basis for the current PNW bid for 13% protein is 88 1/2 cents over the nearby September future, which compares to the calculated basis level of 81 cents over in 2012/13 (the Aug. 1 to July 31 Canadian crop year) crop year and the 82.7 cent average basis calculated since August 1. The premium for an additional one percent protein (14% over 13%) was reported at 18 cents which compares directly to the average premium of 19 cents over the 2012/13 crop year.

Protein premiums may prove to be squeezed or even elusive this upcoming crop year. In their recent Aug. 16 Harvest Report, U.S. Wheat Associates reports that protein in the U.S. winter wheat crop has averaged 13.1% protein thus far, as compared to 12.6% which was the final 2012 protein. This is after an evaluation of 390 of 500 expected samples. To date, flour protein is reported at 12.8%, as compared to the final 2012 number of 11.5% and the five-year average of 10.7%.

Thus far, supplies of protein are plentiful, although the late-spring wheat harvest in the Canadian Prairies as well as the northern States may have a further bearing on the value of protein stocks in the wheat market.

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

(ES)

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