Values for durum wheat have slipped furthest back in this month’s pool return outlook (PRO) from the Canadian Wheat Board, thanks largely to “buyer resistance” against high durum prices.
Durum values in the January 2011-12 PRO, released Jan. 26, are down $2-$11 per tonne from December levels, while other wheats vary from $5 per tonne higher to $3 lower. Feed barley values are flat, while malting barley values are down $1 per tonne from last month.
Price prospects going forward for durum remain “weighed down, in part, by the ability of demand to hold out until early-season 2012-13 production comes online” in the second quarter of this year from producers such as Mexico, North Africa and the U.S. desert region, the CWB said.
“There are short-term reasons to be optimistic about the wheat market but, in general, wheat fundamentals paint a fairly negative picture,” the CWB said.
Weather conditions in South America’s corn- and soybean-growing areas have built some strength into the corn market, which in turn directly affects the wheat market. As well, markets are beginning to take note of potential production in the Northern Hemisphere in 2012-13.
“Legitimate concerns regarding Ukraine winter wheat conditions and western Canadian snowpack issues have provided the market with ammunition to build a ‘wheat’ story,” the board said.
However, “highlighting 2012-13 production potential returns the focus back to the fact that the world has irrefutably produced a record wheat crop in 2011-12.”
The board said it has so far priced about 57 per cent of its expected 2011-12 crop year deliveries of wheat, and expects to have priced about 75 per cent by the end of March.
Strengthening feed barley values in the Black Sea, European Union and Australia, along with “intermittent” demand from the Middle East, have led to a firming of international feed barley values in January, the CWB said. The global coarse grain situation is forecast to loosen in the next production cycle, however, pressuring feed values. No. 1 CW feed barley (Pool A) is flat at $229 per tonne ($4.99/bu.) in the latest PRO.
International malting barley values have been “relatively flat” since the December PRO, the board said.
Market conditions leave Select CW two-row and six-row malting barley both down $1 per tonne at $313 and $297 ($6.81 and $6.47/bu.) respectively.