Chicago futures closed the night higher again. Week on week gains are pretty impressive, capped somewhat by the sharp drop on Monday but healthy all the same. June SRWW gained AUD$12.65 on last Friday’s close and Dec21 is up AUD$15.23 for the same period. Compare this to local increases of +AUD$5 for old crop APW on the track and +AUD$9 for new crop.
The falling basis isn’t restricted to the Australian markets. Other countries like the EU block which are also expected to see a reasonable wheat crop this year are also seeing sharp declines in wheat basis over US futures. This rally continues to be a US futures rally that’s spilling over into other futures market, not necessarily other cash markets dollar for dollar.
In SW Saskatchewan 1CWRS 13.5 wheat for a Dec21 lift is priced at C$323.90 per tonne. Compared to DNS PNW values FOB it’s pretty much bang on. That’s a basis of around +106c over futures, barely enough to cover execution.
Looking at APW ASX futures at AUD$316.50 nearby and local cash prices for APW on the track at Gunnedah the basis is also very poor at +AUD$0.75c tonne, one would usually expect to see this at +AUD$10 or AUD$15.
Canola futures were sharply higher for nearby contracts. Canadian cash bids out of SW Saskatchewan were also sharply higher. A Dec21 lift was up $C14.08 to C$729.47 per tonne. A back of an envelope conversion to an equivalent Aussie port price might come in close to AUD$820 port. Nearby cash would convert to a number port NTL closer to AUD$1081. Paris rapeseed futures were flat to firmer. The Feb22 contract closing at €527 / tonne (AUD$817.00). New crop Canola bids here yesterday were firmer, closing at AUD$740 NTP NTL.