MGEX spring wheat futures closed $1.89 per bushel below its July high today, while canola closed at $69.20 per metric tonne below its September high on the March contract. Cash flow is ample and producers are perhaps inclined to wait this market out for further price direction.
Daily Canadian commentary references the lack of producer deliveries into the system, while the upcoming release of the week 21/22 Grain Statistics Weekly may shed light on movement during the past weeks. Meanwhile, cash basis on the Prairies continues to slowly narrow.
A survey of readily available No. 1 red 13.5% protein spring wheat basis levels across the Prairies resulted in a minus $.84 basis. This is 9 cents/bushel narrower than the $.93 basis reported just prior to Christmas. At that point in time, one customer suggested that cash basis levels for wheat were being briefly narrowed to the mid-60-cents range in such times that unit trains needed to be filled. It's important to understand these shipping patterns at your local elevator and be in constant communication in order to capitalize on such an opportunity.
Canola basis levels have narrowed by $2.63/mt to $5.73/mt ($.13/bu) over the March future since just before Christmas. Cash basis on the West Coast has narrowed by $1 to $43/mt over the March. With the nearby Mar/May and May/July futures spreads continuing to show strength, with the March currently trading at $8.40 over the May, while the May trades at $4.60/MT over the July, and the potential to strengthen even more, any move to contract against the July future should be carefully considered.
Futures markets remain in limbo this week, pending direction from Friday's USDA data release. This has tended to be a most important market-moving report, with corn futures reaching limit moves, in both directions, in five of the past six years. Stay tuned.
Cliff Jamieson can be reached at email@example.com
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