SASKATOON – There seems to be no end in sight to the rapid rise in world wheat markets.
The Canadian Wheat Board has again bumped up its price outlook for 1995-96, with the top grades of all wheat classes, including durum, now expected to fetch over $200 a tonne at export position.
The board’s latest pool return outlook also projects higher prices for both feed and malting barley, with 1 CW barley pegged at $150 a tonne, which would be the highest price in 15 years.
And market analysts like Charlie Pearson of United Grain Growers Ltd. say the market could produce even higher prices, especially if there are any problems with the North American spring wheat crop.
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“I suspect the market and the board’s PRO have a large and good quality spring wheat crop built into it already,” he said. “So with any problem here or in the U.S., there could be some upside in this yet.”
A key to whether the PRO prices are achieved will be farmers’ delivery patterns, said Pearson.
Grain priced late in the crop year has to compete with new crop supplies, and with wheat acreage likely to be up next year, that means wheat or barley priced after April of next year could well be worth less than grain sold during the fall and winter.
“If farmers leave grain in their bin and then dump it at the end of the crop year, that puts the PRO under some pressure of moving down,” he said.
“But if farmers get grain to the board early and they’re able to sell at current prices or higher … then these (PRO) prices are easily achieveable with even some room on the upside.”
The optimism about wheat prices extends south of the border, where one wheat industry official has predicted record prices for 1995-96.
Barry Jenkins of the U.S. National Association of Wheat Growers said the average farmgate price for all wheat sold in the first 15 days of June was $3.85 (U.S.) a bushel, which would be the highest ever for the month.
The record weighted average price for a May-June marketing year is $4.09.
“I think we’re going to break that,” he said. “If you look at the futures down the road, they’re flirting with $5 in some places.”
Some elevators in North Dakota are bidding close to $7 a bushel for old crop durum, he said, adding he expects the U.S. government will reduce export subsidies sharply in light of tight supplies.
