While WCE feed wheat futures prices have remained rela-tively stable throughout the fall and early winter,changes in the price of CBOT corn and the Canada/US currency exchange rate has caused the WCE feed wheat minus CBOT corn spread to be quite volatile.After trading at a premium since the beginning of the 2003-04 crop year,WCE feed wheat futures prices actually closed out the month of January at a discount to CBOT corn.Trade sources suggest that the sudden changes in relative values may be due to the rapid increase in the price of corn during the month of January combined with the sudden decrease in the value of the Canadian dollar in the last half of the month.
The volatility of the WCE feed wheat minus CBOT corn futures spread has resulted in the basis for feed wheat ele-vator cash bids being much more stable against feed wheat futures when compared to CBOT corn.Since the beginning of the 2003-04 crop year,the basis for the average elevator bid for feed wheat in the Par pricing region against WCE feed wheat futures has had a range of $8.92 per tonne,while the average bid for feed wheat basis CBOT corn has had a range of $25.62 per tonne.This once again highlights the feed wheat futures contract 's effectiveness over the CBOT corn contract for price discovery and risk management in the feed wheat market in Canada.