CWB increases Winter Pool PRO

CWB has increased its Pool Return Outlooks for the Winter Pool.

All wheat types increased by $10 per tonne.

Durum rose $6 per tonne.

Canola rose by $35 per tonne.

No. 1 CWRS 12.5 percent protein at port now stands at $345 per tonne.

No. 1 CWAD 12.5 percent protein at port is now $350.

No. 1 canola is now $650.

 

The following is the CWB PRO commentary for
 2012-13 pools

 

Wheat


Wheat futures have bounced off the lows seen at the end of 2012 and early 2013, supported in part by the poor condition of the U.S. Hard Red Winter wheat crop. Crop condition ratings remain poor and the crop remains prone to winterkill should it exit dormancy early given poor fall establishment. The lack of physical corn in the U.S. also suggests that strong wheat feeding will continue through to new crop corn availability.

The corn market is going to have the biggest say as to what happens to wheat prices, and recent strength in wheat futures has been tied to a stronger corn market. Stocks remain tight in the U.S., and the market is counting on a significant recovery in U.S. corn production to restore more comfortable stock levels. With most of the western Corn Belt experiencing moderate to severe drought conditions, weather is going to have to co-operate this spring in order to prevent production problems. Given these factors, futures markets are expected to be volatile and remain more sensitive than usual to weather anomalies.

Given current PRO assumptions, farmers in the Futures Choice Winter Pool can expect to achieve a final return for 1 CWRS 13.5 in store port position made up of the futures value they lock in plus $8 to $16 per tonne, depending on what futures month(s) they are pricing futures in.

 

Durum

Over the past few months the durum market has been taking its cues from wheat and corn markets. Prospects for reduced durum acreage in the U.S. and Canada, lingering concerns about moisture deficits in North Africa, strong North African purchasing activity in recent weeks (which has reduced uncertainty surrounding demand from a key importing region), and a slightly weaker Canadian dollar are supportive of durum values.

 

Canola

The canola futures market has moved up steadily over the past few weeks. The market is starting to factor in more of the tightness of canola supplies as well as how much time remains until new crop canola becomes available. In addition, the fact that corn is presently winning the battle for acres against soybeans in the U.S. likely means soybean prices need to strengthen over the next few months to compete, which in turn will be supportive of canola values.

 

General pool assumptions:

Canadian dollar at par versus the U.S. dollar – the dollar has been trending weaker over the past few weeks.

Winter Pools reflect activity through the second half of the crop year, with sales to be executed by the end of August 2013 (farmer deliveries by the end of July)

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