The Canadian Wheat Board plans to export nine per cent less grain in the year ending July 31, 2010, its chief operating officer said Oct. 30, as poor early growing season weather made for smaller wheat and barley crops than a year ago.
The crops recovered from a potentially disastrous start with record-hot September weather to accelerate maturity and allow the CWB to project exports at typical levels, Ward Weisensel said.
“It has been a volatile year without question,” Weisensel said in an interview at the CWB’s headquarters in Winnipeg. “We were very, very fortunate to see the September that we saw.”
The first killing frost, which can appear as early as late August, didn’t show up until a month later, giving crops time to mature and improving crop size and quality, he said.
The board expects to export at least 17.5 million tonnes of grain in 2009-10, Weisensel said, up from a July 30 estimate of 15.5 million tonnes. In 2008-09, it exported 19.3 million tonnes of grain, the highest volume in nine years.
The CWB is one of the world’s biggest grain marketers, with net revenue of $6 billion last year.
The CWB expects wheat exports of 12.5 million tonnes, down from 13.3 million tonnes last year, with durum exports of 3.5 million tonnes, in line with 3.6 million tonnes in 2008-09.
A new European Union tariff of $25 per tonne on Canadian durum is a concern for the CWB for its impact on exports. Italy was the CWB’s No. 4 durum export market last year.
Barley exports should total 1.5 million to 1.7 million tonnes, down from 2.4 million tonnes last year, depending on feed barley prices. Canadian prices are currently higher than international values, Weisensel said.
The Canadian dollar, which flirted with parity against the U. S. dollar this month, before dropping to the US92.5 cent level, could reduce export targets if it moves past the mid-US90-cent level, Weisensel said.
“It could go either way at this stage, but it’s hard to imagine it going beyond par,” with the U. S. currency, he said.
A rising dollar makes Canadian grain exports less attractive.
The global wheat crop is smaller than last year, but still large. The market is pricing high-quality, high-protein wheat at a premium, Weisensel said.
Protein levels of western Canadian wheat should average 13.2 per cent, which is “reasonable” but lower than the CWB would like, he said. But quality has improved, with 78 per cent of Canada Western Red Spring wheat and durum wheat falling into the top two grades, compared with the normal level of 65 per cent.
World importers are buying grain as needed, rather than building inventory, because of earlier falling prices, but that may change with prices stabilizing, Weisensel said.
Wet October weather has kept farmers from finishing the harvest, although farmers focused first on cereals and have completed 93 per cent of the wheat harvest. Crops like canola and oats, sold outside the CWB, are lagging behind.
The wheat board expects a Western Canada spring wheat crop of about 17 million tonnes, down from 18 million tonnes. Durum production is between 5.2 million and 5.3 million tonnes, compared with 5.5 million tonnes last year. The barley crop totals 8.9 million tonnes, down from 11 million tonnes a year ago.