Even with fundamentals looking positive for the rest of 2012-13, CWB’s early delivery pool return outlook (PRO) for wheat is weighed down by the past month’s activity in wheat futures.
Milling wheat values from the early delivery pool in the former Canadian Wheat Board’s latest 2012-13 PRO, released Friday, are down $6 per tonne from CWB’s previous PRO on Oct. 25.
"Excessive rainfall in key wheat-growing regions in South America has resulted in severe downgrading of the wheat crop, while dry conditions in the U.S. hard red winter wheat region have provided support to U.S. wheat futures markets recently," CWB said Friday.
"For much of the past month, however, wheat futures markets traded lower and Canadian export basis values continued to be under pressure versus comparable U.S. export values."
As a result, the PRO value for high-protein (14 per cent) No. 1 Canada Western red spring (CWRS) wheat slipped Friday to $360 per tonne ($9.80 per bushel) from $366 on Oct. 25.
No. 2 CWRS is down to $344 per tonne ($9.36/bu.), while No. 2 CW red winter falls to $329 ($8.95/bu.).
Wheat values in CWB’s PRO for its harvest pool remain unchanged, with No. 1 CWRS (14 per cent) parked at $368 per tonne.
The early delivery and harvest pools for milling wheat are now about 50 per cent and 25 per cent priced respectively, CWB said Friday.
"The above-average protein content and excellent grade profile of the western Canadian spring wheat continues to result in narrow protein premiums and grade spreads."
Friday’s PRO value for CWB’s new harvest pool for canola, meanwhile, has slipped $20 from Oct. 25 and now sits at $640 per tonne ($14.52/bu.). Less than 10 per cent of the canola pool has been priced.
Despite tight supplies and strong domestic crush demand, canola futures values have followed U.S. soybean futures lower over the past month, CWB said.
"Canola ending stocks are expected to be very tight, and to date there has been little sign that demand is being rationed, all of which is positive for the canola price outlook going forward."
Durum values in CWB’s PROs for both the early delivery and harvest pools also remain unchanged, CWB said.
No. 1 CW amber durum (CWAD) remains at $345 per tonne in the early delivery pool and $350 in the harvest pool. The durum pools are about 75 and 35 per cent sold, respectively.
"There has been little new information in recent weeks to move the durum market," CWB said. "No major problems have developed" for durum in the Mediterranean region.
PRO values are also unchanged from October in both the early delivery and harvest pools for two-row malting barley.
Select CW two-row remains at $347 per tonne ($7.56/bu.) in the early delivery pool and $350 ($7.62/bu.) in the harvest pool. Both those pools, as of Friday, are less than 25 per cent priced.
"Limited supplies" of malting barley in Western Canada still support malting barley values, CWB said. On the other hand, no major crop quality problems have been reported in Australia’s malting barley harvest.
Overseas outlook, domestic results bullish for CWB PROs, Oct. 26, 2012