Spring wheat futures fell, but CWRS bids fell less than half as much as basis narrowed again in every region while wheat moved to port at a fast pace.

December spring wheat futures fell C$12.74 a tonne in the week of October 12 to 16. About C$10 of that came from a lower US-dollar price and about C$3 from a stronger Canadian dollar. Daily market reports mostly covered Chicago wheat, not the Minneapolis spring wheat contract. They tied Tuesday's Chicago dip to traders still weighing USDA's higher forecast of US wheat stocks. Spring wheat also fell on Wednesday, a day Chicago rose, and the reports gave no reason for Friday's fall on all three US wheat exchanges, so the week's fall in spring wheat has no clear market explanation.Charts: Exhibit 20

CWRS bids held up much better. The median regional spot bid fell C$5.27 to C$310.04 a tonne, so basis narrowed C$7.47, and it narrowed in all nine regions again. The four-week narrowing is now larger than in any of the past five years over the same weeks, though it started from a basis wider than in any of those years at that point. Basis is still about C$7 wider than the five-year average for the week, and wider than last year.Charts: Exhibit 20, Exhibit 17, Exhibit 21

The pull came from moving wheat to port. Port terminals received 441,700 tonnes of wheat excluding durum from country elevators, above the five-year range for the week, and country elevator stocks fell for a second week. Vancouver's wheat stocks fell to a third below average, but Vancouver received more wheat than it shipped in the week, so the published flows do not explain that drop. Last week's narrowing came with exports of 608,600 tonnes, about usual for that week of the year. This week exports fell back to 386,700 tonnes from 608,600, though that was still more than in four of the past five years for the week, and basis narrowed further, so the movement of grain to port, not one week's loadings, is doing the work. The four-week export average now runs above the weekly pace needed to reach the official forecast. To keep grain moving at that pace, elevators need deliveries, and a narrower basis is how that shows up.Charts: Exhibit 5, Exhibit 7, Exhibit 2

The system is still not short of wheat. Country elevator stocks are 14 per cent above the five-year average, Alberta's are above the top of the five-year range, and port stocks as a whole are slightly above average. The regional pattern does not point to a port shortage either: basis narrowed least in north and south Alberta and northwest Saskatchewan and most in west Manitoba. Manitoba is the one Prairie province where country stocks are below average. The provincial stock pattern fits the narrowing better than the port pattern does, though southern Saskatchewan narrowed nearly as much as Manitoba. Either way, the narrowing rests on fast movement, not a shortage.Charts: Exhibit 7, Exhibit 6, Exhibit 21

Buyers are paying for wheat now rather than later. Deferred bids sit at a wider basis than the spot bid, which takes back much of the futures carry. After interest, no later month pays more than spot in north and south Alberta or northern Saskatchewan, and the best gain elsewhere is under C$5 a tonne. If rail movement to port slows while country stocks stay above average, the reason for basis to keep narrowing would fade. Exports held near the pace of the past four weeks would keep the pull on deliveries.Charts: Exhibit 58, Exhibit 65