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CWB’s January PROs flat but for durum

Milling durum values are up $5 in the Canadian Wheat Board’s January pool return outlook (PRO) for 2008-09, while malting and feed barley and most wheat values remain flat.

Market fundamentals in durum are bearish, the CWB said Thursday, but the board’s recent sales have “positively contributed” to PRO values, as have lower ocean freight rates and the weaker loonie. However, durum prices are also seeing pressure from large European supplies, hand-to-mouth buying and the decline in the euro against the U.S. dollar.

The $5 increase in milling durum PROs compared to December levels puts No. 1 Canada Western Amber Durum (CWAD, 13.0 per cent protein, at $360 per tonne and No. 4 CWAD at $301 per tonne.

Some minor classes of wheat showed decreases in the January PROs “to reflect lower-priced competition for those products,” the CWB wrote. No. 1 soft white spring (CWSWS) dropped $6 from December levels to $227 per tonne, while No. 1 CWSWS Select (<9.9) slipped $2, to $255 per tonne.

No. 1 red winter (CWRW) fell $5 per tonne in the January PROs, to $248. No. 1 CWRW Select (11.5), however, rose $1, to $268 per tonne.

Designated barleys, feed barleys and other wheats remained unchanged: No. 1 red spring (CWRS) 12.5 remains at $297 per tonne, No. 1 CW feed barley (Pool B) sits at $162 per tonne and Select CW two-row malting barley remains at $320.

The CWB’s PRO cited the Jan. 12 USDA report indicating increased stocks of wheat both in the U.S. and worldwide, putting pressure on markets offset slightly by reports of a three per cent decline in U.S. winter wheat acres.

As well, international wheat prices have continued to decline since the December PRO, pressured by wheat harvests in the Southern Hemisphere and “aggressive” competition from the Black Sea and Europe.

“In the coming months, the focus of international markets will increasingly turn to new-crop prospects,” the CWB wrote.

In malting barley, a large portion of the CWB’s pool is now priced and international prices remain unchanged, though hand-to-mouth buying continues.

Feed barley is still under pressure from “the largest world barley crop in more than 10 years,” the CWB wrote, as well as from general reduced demand due to global economic recession and from large supplies of feed wheat in Europe and the Black Sea region.

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