Record malting barley sales and increased wheat exports are in the Canadian Wheat Board’s plans for 2008-09.
The CWB’s latest Grain Marketing Report calls for an export target of 16 million tonnes of wheat in 2008-09, up 1.4 million tonnes from 2007-08.
As well, the board’s export target for barley is 1.6 million tonnes, of which 1.4 million tonnes are expected to be malting barley. The CWB said its previous record for bulk malting barley exports was set in 1997-98, at 1.3 million tonnes.
“Prices remain relatively high from a historical perspective, although they have dropped from the record highs we saw last year,” CWB chief operating officer Ward Weisensel said in the Grain Marketing Report.
“The CWB has taken advantage of increased rail and lake freight capacity to move increased volumes of this year’s large Prairie crop during the busy post-harvest period,” he said.
Grain buyers, Weisensel said, are taking a cautious “hand-to-mouth” approach to purchases given the current economic uncertainty. On top of the large worldwide crop, extreme market price volatility, tight credit and currency fluctuations are major factors, he said.
Given cautious purchasing, competitors’ aggressive pricing and record world wheat production, the CWB has adopted a “staged approach to acceptance of wheat,” Weisensel said. More grain will be accepted on subsequent contract series, based on progress in the overall sales program, he said.
Global wheat production has increased 12 per cent over last year’s record world crop. Western Canada’s production of the six major grains stands at 54.3 million tonnes, up 25 per cent from the previous year. Overall, the CWB said, the 2008 harvest was above-average in quality.
The size of the crop and this year’s global marketing environment led to Series A acceptance levels being set at 80 per cent of Canada Western Red Spring (CWRS) wheat and 60 per cent of durum, the CWB said. The Series B deadline for wheat sign-up is Jan. 31.
The CWB projects farmers in Saskatchewan, for example, will receive about $246 per tonne for top-quality spring wheat, $297 for durum wheat; and $253 for malting barley.
The board added that the recent “wild ride” of the Canadian dollar emphasizes the importance of CWB hedging strategies, meant to reduce volatility in pool returns and take advantage of opportunities when they arrive.