Tight supplies of board grains have led the Canadian Wheat Board to post its first 2008-09 pool return outlooks (PROs) in some cases well over 110 per cent higher compared to a year ago.
The board’s first PRO for No. 1 Canada Western Red Spring (CWRS) 14.5 is set at $399 per tonne, up from $228 in the first PRO for 2007-08, posted in late February 2007. The PRO for No. 1 Canada Prairie Spring Red (CPSR) is set at $355 per tonne, up 86 per cent from the year-earlier level.
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Where the 2007-08 PROs at that time were mixed and in some cases lower than at the year-earlier period in 2006, the 2008-09 PROs are all significantly higher. As the CWB put it in its PRO commentary Monday, wheat fundamentals “are expected to remain strongly price supportive. World wheat carry-in stocks are projected to be at their lowest levels in 30 years.”
Despite healthy expectations for production in Australia, spring wheat acres in much of the U.S. and Canada are expected to be flat or lower in 2008, and ending stocks overall are expected to remain low, the board said.
“Increased durum production in 2008-09 is expected to moderate international prices during the year, but historically low carry-in stock levels will keep prices supported,” the CWB said.
For example, the CWB’s PRO for No. 1 Canada Western Amber Durum (CWAD) 11.5 is pegged this month at $462 per tonne for 2008-09, up 103 per cent from $227 in the first year-earlier PRO. The PRO for No. 4 CWAD sits at $414 per tonne, up 119 per cent from $189 in the year-earlier period.
Despite projected lower acres in Western Canada, Canadian barley production is expected to rise. Pool A feed barley PROs for 2008-09 now sit at $235 per tonne, up from $182 in the year-earlier PRO.
Tight old-crop supplies and strong new-crop demand are expected to boost malting barley prices in 2008-09, as strong market competition from other crops lowers acres worldwide. However, improved growing conditions in Australia are expected to result in higher global production of barley overall.
The first 2008-09 PROs for Select Canada Western (CW) two-row and six-row malting barley sit at $360 and $340 per tonne, respectively, up from $240 and $220 in the first PROs for ’07-08.
That said, “the CWB’s PRO for malting barley is based on a number of assumptions made during a time of considerable uncertainty for the industry, especially regarding potential federal government actions to move towards an open market for barley,” the board noted.
“The current PRO assumes that the CWB’s single-desk authority will remain in place for the 2008-09 crop year. Any changes to that authority would affect the pool.”
