Poor prospects for crops of milling-quality durum have made it the major mover in the Canadian Wheat Board’s June round of pool return outlooks (PROs), with new-crop durum values up by as much as $79 per tonne.
The CWB on Thursday released its monthly PROs for the 2011-12 crop year, with most milling wheat values other than durum down and barley unchanged, and for the 2010-11 crop year, with old-crop durum up $7 per tonne and other wheats unchanged.
Market prices for durum had been rising “steadily” in recent months, the CWB said in its 2011-12 outlook, at first due to concerns for the seeding prospects for North Dakota durum. Those concerns were “subsequently realized” with that state’s durum crop now “seriously undermined by excessive rain.”
Durum acres in southeastern Saskatchewan share “many of the same weather conditions,” reducing overall Canadian durum acreage, the CWB said. Furthermore, the board said, across North America generally, late seeding has raised the “quality risk” for the 2011-12 crop.
The CWB’s 2011-12 PRO values for Nos. 1, 2 and 3 durum are all up $79 per tonne, with No. 1 Canada Western amber durum (CWAD), 14.5 per cent protein, now pegged at $442 per tonne ($12.03 per bushel), No. 2 CWAD (13.0) at $415 and No. 3 CWAD (13.0) at $386. No. 4 CWAD is up $35 per tonne at $292 ($7.92/bu.), while No. 5 is up $6 at $242.
Among old-crop (2010-11) durum values in the CWB’s new PRO, Nos. 1, 2 and 3 CWADs are up $7 per tonne, with No. 1 CWAD (14.5) at $312 ($8.49/bu.), No. 2 CWAD (11.5) at $297 and No. 3 CWAD (13.0) at $264. Nos. 4 and 5 CWAD are unchanged from May levels ($240 and $235 per tonne respectively).
Wheat futures and cash markets were weaker over the past month, the CWB said, as the weather market dissipated and the global economic situation showed “signs of stress,” which spurred volatility.
The excess water hitting western Manitoba, southeastern Saskatchewan and parts of the U.S. northern Plains has “helped firm quality spreads” for wheat, the board said.
Wheat crops in the European Union have also stabilized with recent rains, while improved weather in the Black Sea region has allowed Russia and Ukraine to free up old-crop supplies for export.
The CWB said it has priced about five per cent of its expected 2011-12 crop year deliveries of wheat and expects that level to reach about 25 per cent by the end of September. In the 2010-11 pool, about 91 per cent of the expected deliveries are priced, with 97 per cent expected to be priced by the end of July.
Among new-crop values in the board’s June PRO, No. 1 CW red spring (CWRS) at 14.5 per cent protein is pegged at $365 per tonne ($9.93/bu.), up $2 per tonne; No. 2 CWRS (11.5) down $3 at $300 ($8.16/bu.); No. 4 CWRS down $7 at $263 ($7.16/bu.); No. 1 CW hard white spring (CWHWS, 13.5) flat at $345 ($9.39/bu.); and CW feed wheat up $1 per tonne at $242 ($6.59/bu.).
Wheat values in the 2010-11 June PRO are unchanged from May levels, with No. 1 CWRS (14.5) at $385 per tonne ($10.48/bu.), No. 2 CWRS (11.5) at $293 ($7.97/bu.), No. 4 CWRS at $258, No. 1 CWHWS (13.0) at $346 and CW feed at $240 ($6.53/bu.).
Malting barley prices are expected to remain firm for the start of the 2011-12 marketing year on lower production estimates out of Europe and fewer seeded acres in North America, the CWB said. “We expect prices to be supported until January, when record production is expected in Australia and Argentina.”
That said, the CWB also expects prices in North America to be “somewhat sheltered” from an easing in international prices as a smaller U.S. barley crop will provide a “higher-priced market” for malting barley trade.
The international price structure for feed barley in 2011-12, meanwhile, “will be defined by exports available from the Black Sea region,” the CWB said.
Malting and feed barley values in the June 2011-12 PRO are unchanged from May levels, with No. 1 CW feed barley (Pool A) at $253 per tonne ($5.51/bu.) and Select CW two-row and six-row at $350 and $333 ($.62 and $7.25/bu.), respectively.
In the June 2010-11 PRO, meanwhile, No. 1 CW feed barley (Pool B) is pegged at $233 per tonne ($5.07/bu.), down $1 from May. Select CW two-row and six-row are both down $3 per tonne from May, at $249 ($5.42/bu.) and $232 ($5.05/bu.) respectively.
Next month’s 2011-12 and 2010-11 PROs are due out July 28.