Canada Markets

Basis Weakness Weighs on Saskatchewan Cash Markets

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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Saskatchewan Agriculture's weekly average cash prices shows No. 1 CWRS dipping for the first time in seven weeks as of Jan. 22. (DTN graphic by Cliff Jamieson)

As seen on the attached chart, the average cash price for No. 1 CWRS wheat reported by Saskatchewan Agriculture dipped $1.44/metric ton over the week ending Jan. 22, the first drop in seven weeks, a period that saw this cash bid increase $23.38/mt to the week ending Jan. 15. This was despite Canadian dollar strength seen over this period.

Over the past week, the March MGEX spring wheat futures fell by 3/4 cent. Despite brutally cold weather experienced across much of the Prairies through the end of last week, along with the Canadian dollar reaching its weakest level against the U.S. dollar in close to one month as of Jan. 22, basis widened or weakened $3.15/mt over the past week when the effects of currency is taken into account.

This could be viewed as a bearish signal in the cash market, in conjunction with the bearish futures close seen on Jan. 22, which saw the March future reach a 13-week high only to close in negative territory, while forming a bearish outside-day trading bar on the daily chart.

Similar weakness can be found in the cash canola market. Saskatchewan Agriculture reported the weekly No. 1 Canada canola bid at $437.96/mt, down for a second week. This is down $2.04/mt from the previous week, while the March future was $1.30/mt higher over the week. Once again, a weaker cash basis was calculated at $39.14/mt, $3.34/mt weaker than calculated for the previous week. Once again, cold weather conditions that should have slowed producer sales along with Canadian dollar weakness failed to support the cash market. This week's cash price is still close to the highest level reported since late February 2019, when this bid was reported at $444.39/mt.

No. 1 CWAD was reported modestly higher over the past week at $267.38/mt, up $0.21/mt, while remaining in a $5/mt range since early October.

There was some movement in pulse prices over the past week, with yellow peas down $0.02/bu., red lentils up $0.15/cwt, desi chickpeas up $3.75/cwt and Kabulis up $0.12/cwt.

As well, No. 3 CW oats increased $4.69/mt to $206.41/mt, approaching the highs reached in May 2019.


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