“Slightly higher” export values for feed barley boosted its value by $7 per tonne in the Canadian Wheat Board’s latest 2008-09 pool return outlook (PRO).
Values for milling wheat, durum and malting-grade barleys all remained unchanged in the CWB’s February PRO, released Thursday.
The PRO value for No. 1 Canada Western (CW) feed barley, Pool B, was posted Thursday at $169 per tonne, up from $162 in the CWB’s January PRO.
Among other examples, No. 1 Canada Western Red Spring (CWRS) wheat, 11.5 per cent protein, remained flat at $287 per tonne; CW Feed wheat remained at $196; No. 1 CW Amber Durum (CWAD), 13.0 per cent protein, was flat at $360; and Select CW two-row designated barley remained at $320.
Many of the world’s barley exporters are currently still “aggressive” but logistical and supply constraints for Australian exports have been “somewhat supportive” of the CWB’s price outlook, the board said Thursday.
Continued weakness in the Canadian dollar has also positively impacted the feed barley PRO, the CWB said, although “the largest world barley crop in more than a decade continues to weigh on the international barley market.”
Corn prices in the U.S. continued to move lower, despite improved export sales, the CWB noted.
A large portion of the CWB’s designated barley pool is now priced, the CWB said, leaving its PROs flat. The board announced in late January that to protect relatively high values in the pool, most new malting barley business for the remainder of 2008-09 would be carried out using its CashPlus program rather than selecting through the pool.
Australian competition still pressure malt barley prices, despite limited supplies, the CWB said, adding that malting barley prices are expected to receive “some support in the coming months” as Australia exhausts its supply.
Last year’s huge global wheat crop is expected to be followed by a smaller, but still large wheat crop in 2009, but the world supply-and-demand balance “remains on a knife’s edge,” the CWB said.
“Any significant production problems have the potential to drive prices higher, while better-than-average growing conditions would pressure markets.”
Concern about the condition of Northern Hemisphere winter wheat crops is providing some price support and is “somewhat” offsetting weak forward demand as buyers purchase hand-to-mouth, the board said. Logistical problems at port in Australia and uncertainty about the availability of export licenses for Argentinian wheat have also spurred volatility.
“Expectations for next year’s crop are increasingly impacting the CWB’s forward price forecasts with increased potential for weather concerns to move the market as spring approaches and winter crops break dormancy,” the board said.
Market prices for durum are getting pressure from large supplies of European durum, the CWB said; buyers are also expecting the arrival of new-crop durum grown in Arizona, California and Mexico and are expected to continue sourcing supplies on a “nearby or next-to-nearby basis” as a result.
Canadian durum supplies, mainly those of higher quality, will be needed by some European and Mediterranean customers to offset lower-quality durum grown in the region. Ocean freight levels and the strength of the euro should make North American durum supplies “more competitive” in Europe, the CWB said.