CWB price forecasts for 2008-09 wheat, durum, feed barley up

The Canadian Wheat Board on Thursday (February 26) left its price projections for wheat, durum and designated barley that will be delivered by producers during the 2008-09 crop year unchanged from its January outlook.

 

The projection for feed barley, however, was raised by C$7 per tonne.

 

The CWB said wheat prices continue to exhibit high levels of day-to-day volatility but were generally unchanged over the past month. Concern about the condition of Northern Hemisphere winter wheat crops provided some price support and helped offset weak forward demand as buyers purchase hand-to-mouth.

 

Logistical problems at ports in Australia and uncertainty about the availability of export licenses for Argentine wheat contributed to price volatility since the last pool return outlook.

 

The CWB said large supplies of European durum continue to weigh on market prices.

 

Buyers also looked forward to the arrival of new-crop durum produced in Arizona, California and Mexico, and were expected to continue sourcing supplies on a nearby or next-to-nearby basis as a result. Canadian supplies, primarily of higher quality, will be required by some European and Mediterranean customers to offset lower-quality durum produced in the region.

 

Ocean freight levels and the strength of the euro should make North American durum supplies more competitive in Europe. Winter durum wheat plantings are generally complete in the Mediterranean and preliminarily production estimates are lower than last year. However, current crop conditions in the area remain generally good.

 

Grade spreads were also adjusted slightly this month, according to the CWB, as the supply of high-grade durum versus demand is relatively tight in comparison to lower grades.

 

The malting barley PRO was unchanged in February from the January outlook, with a large portion of the pool now priced, the CWB said. Australian competition continues to pressure malt barley prices, despite limited supplies. Malting barley prices are expected to receive some support in the coming months as Australia exhausts its supply of malting barley.

 

Feed barley prices moved up marginally in the February outlook. The CWB said that while many of the world's barley exporters remain aggressive, logistical and supply constraints for Australian exports have been somewhat supportive of the price outlook.

 

 

The 2008-09 crop year began Aug. 1 and ends July 31.