DTN analysis shows the National Average Spring Wheat Basis in the United States at 2 cents under the December Minneapolis wheat future on Nov. 26, which is 2 cents stronger than last week's close and 16 cents stronger than the five-year average for this date. While the current soft red winter wheat basis is well above the strongest basis seen in the past five years and the current hard red winter wheat basis is seen just slightly stronger than the strongest basis seen in the past five years, the current spring wheat basis in the U.S. is trending towards a test of the strongest basis seen in the past five years (not shown).
Since Aug. 1, or the start of the Canadian 2019-20 crop year, the National Average Basis in the U.S. has strengthened from 62 1/4 cents under the December contract to 2 cents under on Nov. 26, a difference of 60 1/4 cents or $22.14/metric ton. The strengthening in the cash basis has offset a 38 1/4-cent loss in futures realized over this same period, while holding U.S. bids in a narrow range just below $5/bushel USD.
The pdqinfo.ca data shown on the attached graphic shows the No. 1 CWRS 13.5% protein basis for southwest Saskatchewan also strengthening since the start of the crop year, from $22/mt over the December contract on Aug. 1 to $29.96/mt over as of Nov. 26, excluding the effects of moves in the Canadian dollar. Since the beginning of the crop year, the average bid for this region has fallen by $6.09/mt, due to a drop in futures of $14.05/mt, partially sheltered by a $7.96/mt strengthening in basis.
While basis remained steady over the week of the CN rail strike, it strengthened $1.10/mt on Tuesday in the southwestern area of Saskatchewan on news of a tentative agreement between CN and its staff. This basis also strengthened a further $0.61/mt on Wednesday. This is the strongest basis seen since late-August. Over the past four years, this basis for this region has averaged $36.42/mt over on this date.
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