Milling wheat and feed barley values are unchanged in the Canadian Wheat Board’s latest 2009-10 pool return outlook (PRO), while global production numbers pressure durum and malting barley values.
The CWB on Thursday posted values $8 per tonne lower for milling-quality grades of Canada Western Amber Durum (CWAD) compared to September levels.
October values range from $227 per tonne ($6.18 per bushel) for No. 1 CWAD at 14.5 per cent protein to $165 per tonne ($4.49 per bushel) for No. 4 CWAD. No. 5 CWAD was flat at $149 per tonne.
Malting-grade designated barley values were cut from September levels by $4 per tonne in the October PROs. Select CW two-row dropped to $208 per tonne ($4.53 per bushel) while Select CW six-row slipped to $190 per tonne ($4.14 per bushel).
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“The fundamentals of the durum market are weaker than they have been for many years,” the CWB wrote in its outlook Thursday.
Large North American crops, particularly in the U.S., along with weak post-harvest demand from major importing countries, have kept durum prices under pressure, the board said, and “significantly” higher durum import levies into the European Union have added uncertainty to the outlook.
However, the CWB said, there has been some recovery from the lows experienced during the North American durum harvest, while increased demand is expected to be supportive of the world price structure as major durum importers begin to deplete domestic supplies.
Malting barley prices, meanwhile, were pressured lower by large malting barley stocks, ample global production and a strong Canadian dollar, the CWB said, also noting large supplies of malting-quality barley in Europe and increased production estimates in Australia.
Wheat, feed barley
Milling wheat PROs remained flat, ranging from $263 per tonne ($7.16 per bushel) for No. 1 Canada Western Red Spring (CWRS) at 14.5 per cent protein to $183 per tonne ($4.98 per bushel) for No. 4 CWRS. CW Feed wheat remains at $149 per tonne. No. 1 CW feed barley (Pool A) sits flat at $145 per tonne.
International wheat values have strengthened on a U.S. dollar basis over the past month, mostly on the relative strength of non-U.S. currencies such as the euro, Russia’s ruble and Australia’s dollar, the CWB said.
However, the Canadian dollar has also strengthened, offsetting much of the impact of the U.S. dollar-price increases.
The U.S. Department of Agriculture now forecasts world wheat production at about 668 million tonnes, which would be the second largest wheat crop in history, the board noted. However, Brazilian production is expected to drop by about 25 per cent, forcing more imports from other suppliers as exports from Argentina will be limited by high export taxes.
Global feed barley prices have risen slightly in the past month but the stronger loonie has offset gains from the U.S.-dollar-based export price structure, the CWB said. Harvest concerns for the U.S. corn crop, however, have been supportive for feed grains.
USDA forecasts global barley production of 147 million tonnes, five million above the five-year average, the CWB said, and large carry-in stocks of barley will counter smaller-than-normal Canadian barley production.
Black Sea feed barley remains “the cheapest source of feed grain in the world,” the board observed.
