SASKATOON – The Canadian Wheat Board lowered its monthly price projections for the 1995 spring wheat and durum crop, but not as drastically as American futures markets have fallen in the same time.
The board shaved $5 per tonne off spring wheat estimates and $8 per tonne off durum estimates.
It said the 1997 No. 1 Canada Western hard red spring wheat pool is likely to fetch between $266 and $286 per tonne, or $7.23 and $7.78 a bushel. Less average elevation, freight and dockage for Saskatchewan of nearly $48 per tonne, that translates to a farmgate price of $220-$240 per tonne ($5.99-$6.53 a bushel).
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But Steve Scheutz, a market analyst with the board in Winnipeg, said U.S. milling wheat futures have fallen $50 a tonne ($1 U.S.a bushel) in that same space.
“It’s a function of us looking at average prices for the whole year,” Scheutz said of the board’s more optimistic outlook.
While harvest pressure and lacklustre demand for U.S. wheat have hurt American prices, Scheutz said it’s just a matter of time before importers will resume buying.
And when they do, Scheutz said they may find prices are higher. Wheat is now competitively priced as a feed grain in lieu of corn or barley.
Wheat for feed
“Buyers that play the waiting game may go back to the market and find that it (wheat) got fed to a chicken or a hog,” Scheutz said.
The timing of worldwide supplies also influenced the board’s price forecast.
With supplies of American hard red winter wheat available now, and new-crop Southern Hemisphere wheat from Argentina and Australia not available until early 1997, Sheutz said the board has a “good opportunity to sell in the fall.”
Shawn McComb, an international grains analyst with the WEFA Group in Pennsylvania, said Canada doesn’t need to be in the international wheat market now and points to a lagging Canadian wheat export pace as evidence of the board’s strategy for 1996-97.
With world wheat supplies short, Canada and the U.S. don’t have to sell at the same time, he said. “There’s the opportunity for Canada to step back and then the board comes back in the fall in a big way,” he said.
