The CWB has set the highest ever Pool Return Outlook for durum wheat as it released its September Pool Return Outlook (PRO) for the 2007-08 crop year. Top grade durum growers can expect to receive $446 per tonne or $12.14 per bushel.
Milling wheat PROs are $35 to $49 per tonne higher relative to the August 2007 PRO, while milling durum PROs are up $115 to $132 per tonne. The Pool A feed barley PRO is $37 per tonne higher compared to August, while designated barley PROs are $26 to $28 per tonne higher.
Wheat
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World wheat supplies continued to tighten over the past month. Ongoing drought significantly reduced estimates of Australia’s crop to 13.5 million tonnes (IGC). There is also still some uncertainty about the Canadian harvest as progress in Western Canada has been delayed by wet conditions. The U.S. continues to have strong export sales and according to the USDA, they have sold 75 per cent of their 2007-08 export program, up from 41 per cent at this time last year. The advanced pace of sales continues to push futures values higher. Futures prices in the U.S. over the past month have surpassed record highs set more than 30 years ago, indicative of the strong demand for wheat. The Canadian dollar also traded at parity with the U.S. dollar for the first time in 30 years, partially offsetting the high futures prices and thus returns to Canadian farmers. The world is now focusing on the southern hemisphere’s wheat crop and world wheat acreage for 2008-09.
Durum
The world durum market continues to be very strong with prices surpassing previous record highs set more than 10 years ago. Production problems in Europe and Canadarains during the European harvest and dryness in Canada’s durum growing regionsreduced their respective durum crops. Australian durum supplies are expected to be limited by the ongoing drought. Estimates of global durum production have dropped to below last year’s levels. Production problems coupled with low ending durum stocks for 2006-07 have resulted in extremely tight world supplies. Despite a dramatic increase in world prices, there continues to be strong demand for durum throughout the world. High prices are expected to limit demand, but supplies are expected to remain tight through to the new crop in 2008-09.
Feed barley
Global feed barley fundamentals have tightened since the last feed barley PRO was released. Expectations for Australian barley production have declined dramatically due to drought. Without significant rain, the crop remains in peril over the next month. The reduction in anticipated Australian exportable surplus has provided impetus for rising prices and a tightening of the feed barley market. A continuation of export restrictions in Ukraine and the expected prohibitive export tax in Russia also add pressure to the tight world feed barley situation.
Designated barley
The global malting barley price outlook remains very strong due to tight global supply. Quality concerns in Canada, the U.S. and, in particular, the EU have continued to add support to the malting barley market. The sharp decline in Australian harvest prospects reduces the availability of exportable malting barley supplies going forward. Designated barley prices should be supported through the Australian harvest and into the early part of next year.
For more information:
http://www.cwb.ca/dom/db/contracts/pool_return/pro.nsf/WebPRPub/2007_20070927.html?OpenDocument&CropYr=2007-08
