The Canadian Wheat Board expects to export about 14 per cent more grain in the year ending July 31, 2009, than initially forecast because of a better-than-expected harvest, its chief operating officer said Oct. 22.
The global financial crisis has pressured grain prices as funds and other investors bailed out of commodities, but, overall, world stocks remain tight, Ward Weisensel said.
“The financial crisis may have an impact on demand in particular areas. It’s very difficult to tell at this stage,” he said in an interview.
“But, overall, the world is going to consume a lot more wheat this year than what the world consumed last year.”
The CWB, one of the world’s largest wheat exporters, with $7 billion in revenue last year, has not seen any defaults on sales or price renegotiations, Weisensel said.
“Customers are buying more hand to mouth. You want to run lower inventories because that ties up less capital,” he said.
“But we came into this year with people pretty tight (on inventories)… because of pricing,” he noted.
Demand for grain, priced in U. S. dollars, has not been significantly affected by the strengthening of the U. S. dollar relative to importers’ currencies, he said.
Better harvest, higher target
The CWB has targeted exports of about 17.5 million tonnes of wheat, durum and barley, Weisensel said, up from August estimates of 15.3 million tonnes.
Both yields and quality were surprisingly good, given late planting and cool, wet weather during the summer, he said.
About 75 per cent of the Prairie spring wheat crop will achieve the top two grades, compared with the long-term average of 65 per cent, he said.
Average protein levels are 13.5 per cent, which is consistent with long-term averages, but down from last year’s high-protein crop.
The CWB expects wheat exports of 12.5 million tonnes this year, he said, up from 2007-08 exports of 11.3 million tonnes, with durum exports forecast at 3.5 million tonnes, up from 3.1 million tonnes in 2007-08.
The CWB also expects to export about 1.5 million tonnes of barley, he said, down from 2.9 million tonnes last year.
Canadian feed barley exports were particularly strong last year because of high prices, but values in the domestic livestock market may keep more of the crop closer to home this year, he said.