Canada Markets

The continuous new-crop December hard red spring wheat/December hard red winter wheat spread, viewed as a proxy for the demand for high-protein wheat, points to indecision and has formed a consolidation pattern on the chart.

The December HRS/December HRW spread closed 9 cents lower at 36 1/2 cents Wednesday (HRS over HRW), after reaching a lower-high in the months of January, March and May in 2023, as seen on the accompanying chart. This is seen lower than the 45 cents reported one year ago on this day, the five-year average for this date of 56 1/4 cents and the 10-year average for this date of 42.55 cents. The five-year average from 2017-18 through 2021-22 is calculated at 88.37 cents, ranging from a high of $2.7725 reached in November 2021 and a low of minus 63 cents, reached in March 2022.

The consolidation pattern seen on the attached chart, shows Wednesday's resistance at 45.18 cents and Wednesday's support at 16.5 cents.

HRW crop ratings are viewed as the poorest seen in decades, while the forecast U.S. spring wheat acreage is the lowest in decades, and this week's USDA Crop Progress report shows planting progress behind the average pace. At the same time, Statistics Canada's April 26 report estimating the intended spring wheat area up 7.5% from last year, 10% above average and the highest since 2001 has perhaps eased all concerns.

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

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