Wheat prices may have started to turn the corner, says an analyst with Calgary’s Mitcon Inc.
But that doesn’t mean they are going to rise in a hurry, Paul Cassidy told an outlook conference here on Dec. 3.
According to international projections, the world will consume more wheat than it produced this year, said Cassidy. That will mean lower ending stocks.
But most of those stocks will be held by Europe, the United States, Australia and Canada, the four largest wheat exporters in the world, meaning prices will have a hard time rising, said Cassidy. However, with a smaller pool of wheat in Canada, the Canadian Wheat Board will be able to focus on the highest-priced markets, he said. More wheat might end up in feedlots too since Canada Prairie Spring varieties are competitive with barley.
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Farmers on the western Prairies who need cash might want to check out domestic bids for feed wheat since they are competitive with the mid-range of the wheat board’s pool return outlook, he said.
More farmers are growing CPS wheat instead of barley because of its similar costs of production but higher yields and revenues.
Next year, he expects CPS acreage to rise, especially in central Alberta where farmers can choose between the local feed market, Fraser Valley feed market and the world market.
But farmers in Manitoba and eastern Saskatchewan will probably plant less wheat because of higher freight costs and problems with midge and fusarium, he said.
