Trent Klarenbach, BSA AgEc, PAg, founder and lead analyst, Klarenbach Research
Prairie grain prices stayed under pressure this week.
January canola was at C$785/tonne on Oct 21 after nearby futures broke lower on the weekly chart.
December hard red spring wheat futures fell below their moving averages to $6.495/bu.
Durum held up better than spring wheat, with the durum-to-spring-wheat ratio still favouring durum.
Canola $RS_F ( 0.0% )
January canola futures were at C$785/tonne on Oct 21.
The Klarenbach Saskatchewan Canola Price Index was $16.42/bu on Oct 21.
Nearby futures have broken lower on the weekly chart, and price action has been choppy.
Posted Saskatchewan canola basis sits in the bottom quarter of its 11-year range.
Full analysis: Canola Price Breakdown: Futures Break Lower on the Weekly Chart.
Spring wheat (CWRS)
December U.S. hard red spring wheat futures were at $6.495/bu on Oct 21.
Trent's market sentiment is bearish across the primary 1–3 month timeframes.
A recent rally above declining moving averages failed to hold, leading to a retest of the 50-week moving average and prior support.
On the monthly chart, a "death cross" (the 50-period moving average below the 200-period) remains a non-bullish signal.
He sees a good chance of a brief relief rally in grain futures before further downside risk.
Full analysis: Hard Red Spring Wheat: Futures Fall Below Moving Averages.
Durum
The U.S. Cash Durum Wheat Index was $5.98/bu on Oct 22 and $5.95/bu on Oct 23.
Trent's outlook is bearish in the short to medium term (out to six months), though the broader chart still suggests higher long-term potential.
He expects a short-term sell-off across the major grains to weigh on durum as well.
European durum is also consolidating, in line with the pullbacks in North American markets.
Full analysis: Durum Wheat Market: SK, US and Europe Face Pressure.
Durum vs spring wheat
Trent also tracked the ratio of the U.S. Cash Durum Wheat Index to nearby hard red spring wheat futures, which were at $5.95/bu and $6.44/bu on Oct 23.
On Aug. 17, he flagged the ratio at historically low support and anticipated durum strengthening relative to spring wheat.
Since then, the ratio bottomed at trendline support, broke out and moved above its 50-week moving average.
Relative price movement still favours durum, mostly because spring wheat is falling faster than durum.
Full analysis: Durum vs Wheat Ratio: Prairies Spread Analysis.
Feed barley
This week's barley post was a guide rather than a market update.
It explains how Saskatchewan feed barley bids are built, why Saskatchewan and southern Alberta are charted separately, and what moves prices: cattle feeding demand, US corn, crop size and quality, freight and the Canadian dollar.
What to watch next week
Whether the brief relief rally in grain futures Trent flagged shows up before further downside.
Whether the expected short-term sell-off across the major grains reaches durum.
Canola's follow-through after the weekly breakdown, and where Saskatchewan basis goes from the bottom quarter of its range.
The durum-to-spring-wheat ratio, which still favours durum.
European durum near the €300/tonne mark.
This week's posts
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