May 29, 2009

The Canadian Wheat Board has lowered its price projections from those in March for wheat and malting barley to be delivered by producers during the 2008-09 crop year.

The crop year began Aug. 1, 2008, and ends July 31, 2009.

The Pool Return Outlook, or PRO, for milling quality wheats were unchanged to C$2 lower than the March forecast, while malt barley PRO's were down C$3. The PRO for milling durum was increased C$5 to $6 from the March estimate.

The CWB said that during the past month, US wheat futures have remained extremely volatile on a day-to-day basis, with prices strengthening significantly since the last PRO.

However, since the last PRO, the Canadian dollar also has appreciated significantly, which has offset much of the gains in US wheat futures values.

In addition, a large percentage of the 2008-09 wheat pool is sold at this time of the marketing year and, as the size of the unsold portion decreases, market price changes have significantly less influence on PRO values, the CWB said.

Global feed barley prices moved higher during the past month, despite large supplies of barley, feed wheat and corn, the CWB said. Planting delays in the eastern Corn Belt are causing concerns about US corn production, supporting international feed prices.

Drought conditions in Spain and dry weather in Eastern Europe has led to production concerns in the main feed barley growing areas.

Despite the rise in international feed barley prices, malt barley prices continued to be pressured by large supplies in several key malt barley-producing countries.

Abundant old-crop stocks have held their quality and are being carried forward, putting pressure on the new-crop price structure. These large supplies are allowing buyers to remain very selective, according to the CWB.