July 1, 2008

 

US situation pushes Canadian feed grain prices higher

 

 

Higher US corn prices have prompted the Canadian Wheat Board to increase its price projections for wheat, durum, designated barley and feed barley. 

 

The Canadian Wheat Board released its Pool Return Outlook for June last week.

 

Projected values are US$9-10 per tonne stronger for milling wheat, US$8-10 stronger for durum, US$6 higher for designated barley and about US$10 higher for feed barley compared to the May PRO.

 

Wheat Board market analyst David Boyes says grain values are being driven by unfavourable weather south of the border.

 

The biggest factor by far over the last month has been the situation in the US corn crop.

 

Late planting, cool wet weather and excessive floods have caused real concerns about the size and quality of the US corn crop amid heightened demand.

 

With a lower corn crop expected, wheat which was expected at record supplies earlier is going to have to replace some of the corn production lost, causing the food supply situation to remain fairly tight next year. These developments in turn can only mean higher than average prices, Boyles said.

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