Continued volatility in new-crop U.S. wheat futures has taken $2 per tonne off the Canadian Wheat Board’s pool return outlook (PRO) for most grades of new-crop milling wheat.
In its latest PRO, released Thursday, the CWB said global production estimates still point to a “significantly larger” wheat crop in the coming year and crop conditions in Ukraine, Russia and Europe have been “mostly favourable” in March.
Offsetting those downward pressures are concerns over the condition of the U.S. hard red winter wheat crop and expected dryness in spring wheat-growing areas of both Canada and the U.S., the board wrote.
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The CWB thus shaved its 2008-09 PROs for all grades of Canada Western Red Spring (CWRS) and many others by $2 per tonne from February levels, with No. 1 CWRS 14.5 pegged at $397 per tonne, down from $399. No. 1 Canada Western Soft White Spring (CWSWS) dropped $17 per tonne to $329 on a projected increase in Canadian production, while the CWB pegged a No. 1 CWSWS Select 9.9 category at $347 per tonne.
Overall, tight durum supplies are expected to support the durum market until new-crop supplies are assured, the CWB wrote. An improved moisture outlook in Italy and southern France has “stabilized” the durum outlook there, although warm weather and below-normal rainfall are causing concern in North Africa and Spain. U.S. desert durum’s condition is seen as good, but dry conditions in North America’s durum-growing areas are causing concern.
Thus, the CWB trimmed milling durum PROs for 2008-09 by $7 to $15 per tonne, with No. 1 CWAD 14.5 dropping $7 from February levels to $463 per tonne, and No. 4 CWAD dropping $15 per tonne, to $399.
Designated and feed barley PROs for 2008-09 remained unchanged in March, as demand offsets pressure from expected increases in new-crop supplies. No. 1 CW pool A feed barley remains at $235 per tonne, while Select CW two-row designated barley remains at $360.
2007-08
The CWB on Thursday also rolled out a “largely unchanged” PRO for the 2007-08 crop year, but for the revised values of feed wheat and No. 4 durum. CW Feed wheat for March sits at $318 per tonne, up $5 from February, while No. 4 CWAD jumps $3 per tonne, to $503. No. 1 CW feed barley (Pool B), sits unchanged at $275 per tonne from the unusual mid-month PRO released March 7.
Wheat PROs remain mostly unchanged despite market volatility, focusing both on tight stocks and estimates for a significantly larger wheat crop. Tight durum stocks remain offset by limited demand, while Saudi Arabian demand and tight stocks should support feed barley until new-crop supplies arrive. Variability in designated barley due to price changes is limited, with most of the sales for the 2007-08 pool complete, the CWB said.
