Wheat futures have been unable to build any upward momentum since the middle of summer, as the market sits on a record-sized world crop waiting for fresh trend-setting news.
U.S. currency strength is limiting export demand and the ability of Minneapolis-based futures to move higher, notes Mike Davey of FarmLink Marketing Solutions in the interview below.
However, thanks to the exchange rate, there have been opportunities for Canadian farmers to lock-in favourable basis levels relative to U.S. prices, but the basis has also fallen lately as grain companies have slowed their purchasing.
“We think values will firm over time,” says Davey. “There’s lots of variable pricing in the Prairies, and not everybody is going to see the real attractive basis or flat price levels — there’s some regionalization here — but if you see a good opportunity, pick away at it and take advantage of those.”
The currency effect, slow U.S. exports, narrowing basis levels and tight protein premiums — it’s all in this wheat market conversation: