Near-term supply issues boost wheat in CWB PROs

A slip in wheat exports from the Black Sea region has boosted nearby international values for wheat and goosed the CWB’s latest pool return outlook (PRO).

"Winter weather and tightening supplies" were blamed for the drop in Black Sea exports, which could only be partially filled by wheat from Argentina and Australia, with the resulting rise in export values leading to "solid" U.S. sales during the past month, the CWB said Thursday.

The PRO for high-protein (14.5 per cent) No. 1 Canada Western red spring (CWRS) was boosted Thursday to $331 per tonne ($9.01 per bushel), up from $320 in the February PRO.

No. 3 CWRS rose $9 per tonne, to $246 ($6.70/bu.), while No. 1 CW red winter (CWRW, 11 per cent) rose $8, to $253 ($6.89/bu.). CW Feed wheat rose $7 per tonne, to $219 ($5.96/bu.).

Good news aside, "a large world carry-out of wheat in 2011-12 and the potential for relatively large supplies for the 2012-13 crop continue to weigh on the overall wheat outlook," the CWB said Thursday.

"The prospect for increased corn plantings (in the U.S. and other exporting regions) is also a concern for the wheat market. Wheat is still largely supported by current corn values and any drop in corn prices will likely result in a drop in wheat values."

The CWB noted Thursday it has priced about 72 per cent of the expected 2011-12 crop year deliveries of wheat, and expects to have about 88 per cent priced by the end of May.

Durum

While following the ups and downs in wheat markets, durum values also recently found support from "continued dryness" in the western Mediterranean region, the CWB said.

Here at home, the price spread between durum and spring wheat remains "very narrow," which is expected to weigh on any increases in Prairie durum acres.

The prospect of early seeding on the Prairies, thanks to warm weather during March, is "generally positive for wheat yields and quality," although dryness in North America’s durum-growing regions could also pose a drought risk.

Durum values in Thursday’s March PRO were largely flat, with No. 1 CW amber durum (CWAD, 14.5 per cent) stuck at $353 per tonne ($9.61/bu.) and No. 3 CWAD at $307 ($8.36/bu.). Only No. 5 CWAD rose to $219 per tonne ($5.96/bu.), up $7 from the February PRO.

Malting barley

China has "stepped back" from the malting barley market, indicating "comfortable supplies," the CWB said. Further supplies are still needed to cover global demand in 2011-12, but "ample stocks in Canada, Australia and Argentina will more than cover these requirements."

Global malting barley premiums have narrowed this month as feed barley prices rise and malting barley values fall, the CWB warned. "If malting barley premiums continue to fall, it could put malting barley area at risk in Canada and Europe, as farmers may be reluctant to grow malting varieties."

That said, initial barley production estimates are up in both Canada and Europe, while "sizeable" crops are expected in Australia and Argentina.

PRO values for Select CW two-row and six-row malting barley both slipped Thursday by $2 per tonne from February values, to $309 ($6.73/bu.) and $294 ($6.40/bu.) respectively.

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