Prices, curve structure, and premiums
Canadian Wheat (Platts) futures, contract code CWR, complement the suite of CME Group Wheat futures, which includes Chicago Wheat, Kanasas City Wheat, Black Sea Wheat, and Australian Wheat. CWR is cash-settled basis Platts CWRS (Canadian Western Red Spring) Wheat for Number 2 CWRS 13.5% protein FOB Vancouver daily price assessment.
CWR closely tracks the FOB Vancouver Wheat cash market and allows commercial hedgers to manage price exposure to this market with an effective hedging tool. The graph below shows the premium between MGEX HRS front month futures and Platts 13.5% FOB Vancouver daily cash prices. There has been significant movement in the premium over the last 11 months – since early July, the premium doubled from 72 cents/bushel to 144 cents/bushel, then back to 90 cents/bushel; representing a shift of as much as 7% compared to the MGEX futures price.
As with all other futures markets, CME Group publishes daily settlement prices for each listed CWR contract month here.
These provide an indication of futures value over two crops years, 2022 and 2023.
The futures curve also shows the carry or backwardation between the different months. Currently, Mar 23 is trading some $10 per MT above Dec 22, a carry of $3.33 per MT per month.
All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.
