February 26, 2010

The Canadian Wheat Board (CWB) has increased its price projections for most classes of wheat sold during the current 2009-10 crop year, which ends July 31.

The pool return outlooks released Thursday (Feb 25) were left unchanged for durum and malt barley, while feed barley was revised slightly lower.

Wheat values were in a range between steady to an increase of CAD5 (US$4.73) per tonne from January, with most classes of wheat seeing increases. While the outlooks were mostly higher, the CWB noted that global wheat supplies remain burdensome and pointed to recent USDA data showing an increase in world wheat ending stocks. Movements in the currency markets and outside commodity markets will be a factor in wheat prices going forward, according to the CWB.

The outlooks are the forecast of the final pool return. It includes the estimated value on grain that has already been priced and the forecast value on grain that has yet to be priced, said the CWB.

Durum outlook was steady on the month. The CWB said ample world supplies and favourable North African crop conditions continued to keep the market under pressure. The depreciation of the euro has also led to reduced demand from the European Union.

The feed barley outlook was lowered by CAD (US$1.89) per tonne from the previous month. Large Black Sea and European supplies were keeping Canada out of the Middle Eastern market. Australia also had more barley grade as feed this year, putting further pressure on international values, said the CWB.

The malt barley outlook was unchanged from January. Overall global supplies were described as adequate, although quality concerns in Australia were cutting into some of the exports from that country. Chinese demand was increasing slightly, but large European supplies may displace Canadian malt barley into China, said the CWB.