Canadian wheat prices maintain bearish trend despite higher close on day

Western Canadian wheat prices ended a nine-day decline June 11, but the overall lower price trend continued amid reduced demand for forward shipments out of Vancouver in recent sessions.

"Asian demand is lacking and are awaiting falling prices, pushing exporters to lower basis levels as forward demand is very light," a source said.

Platts 13.5% CWRS wheat FOB Vancouver 30-45 days forward was assessed at $281.18/mt June 11, a $1.74/mt increase day on day. However, from May 28-June 10 prices experienced a sustained downtrend and saw a decrease of $32.70/mt during that period.

Despite a day-on-day increase, recent feedback indicated that market participants thought the bearish price trend would remain. According to market feedback, the lower price trend provided a great opportunity for buyers in the market to lock in volume, but producers appeared content to wait out for better pricing opportunities.

"I think the market will remain depressed for a bit. Bangladesh has ample stocks for now, and without a China buying interest, the market should continue slipping," a separate source said.

Before May 28, FOB Vancouver 13.5% CWRS wheat export prices were trending higher on concerns regarding Black Sea wheat production and global supply. Although Black Sea production concerns remained, the US and China wheat harvest recently began putting pressure on prices and alleviating some of the previous supply concerns.

Further bearish support came when Turkey announced June 6 that the country would pause wheat imports from June 21 to Oct. 15 to protect domestic farmers from price fluctuations and create favorable market conditions for producers.

Robust demand coverage for more prompt 13.5% CWRS wheat shipments and general buying interest for old crop purchases continued to wane as the trade maintained focus on the new spring wheat crop.

Through June 4, spring wheat seeding was virtually complete across the growing areas of Manitoba, Saskatchewan, and Alberta, according to the most recent provincial crop reports. Market participants anticipated that the new wheat crop production would be in line with, or above, the previous years' levels.

"Since futures [have] fallen off the highs of last week, the old crop purchases have slowed down quite a bit," a third source said.

The September MGEX spring wheat futures contract settled at $6.8925/bushel June 11, up 4.75 cents on the day.

Platts is part of S&P Global Commodity Insights.