The Pool Return Outlook for wheat continues to fall as the world keeps finding more supply.
The Canadian Wheat Board said Russian and other nontraditional exporters are filling world demand, leaving more wheat in U.S. bins than analysts had expected a few months ago.
“The slow U.S. export pace is really dragging,” said CWB market analyst Dwayne Lee.
The United States Department of Agriculture recently raised its estimate of U.S. wheat ending stocks by 1.9 million tonnes to 11.4 million tonnes, due in part to the larger than expected exports from new sources.
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Russia is likely to export the third largest amount of wheat in the world this year, “a huge change in world trade flows.”
The wheat PRO is off $10-$16 per tonne this month.
Since the end of October, the PRO for No. 1 Canada Western Red Spring wheat (13.5 percent protein) has fallen by $38 per tonne. But that is less than the fall in U.S. hard red wheat prices of $59-$61 per tonne.
The PRO has fallen less drastically because it is an expected average of a crop year’s sales. Lower priced wheat sales are averaged against higher price sales from earlier in the crop year.
The strengthening Canadian dollar is also hurting PRO values, Lee said.
While wheat prices have been falling since mid-autumn, Lee said the market is still volatile and could go either way.
Analysts are still uncertain about several weather issues, including dryness in the U.S. hard red winter wheat crop, Australian moisture conditions and winterkill in the Russian and Ukrainian winter wheat crops.
“There are a lot of factors to look at,” said Lee.
Durum prices also fell by $5-$11 per tonne because of supply pressures on two fronts. The European Union and Syria are exporting more than expected, and North Africa – the biggest market for durum – is experiencing good weather.
“They’ve had excellent rains so far,” he said.
The feed barley PRO fell by $5 because of subsidized European exports and large supplies in Russia and other nontraditional exporters.
Malting barley values did not change.
