Crop values were generally lower in the Canadian Wheat Board’s 2010-11 and 2011-12 Pool Return Outlooks.
In the PRO commentary, the wheat board said global uncertainty caused by Japan’s earthquake and unrest in the Middle East and North Africa had pressured prices lower.
However, wheat futures have also retreated on expectation that stocks at the end of 2010-11 will not be uncomfortably tight and that better weather will help increase wheat production from last year.
Year-end stocks are projected at 180 million tonnes for a stocks-to-use ratio of 27 percent compared to corn’s ratio of 15 percent.
Read Also
India slaps 30 per cent import duty on yellow peas
India has imposed a 30 per cent duty on yellow pea imports with a bill of lading date on or after Nov. 1, 2025.
“New crop production is estimated to approach 660 million tonnes and, barring further deterioration in Canadian or U.S. prospects, that number could increase towards 670 million tonnes,” said the commentary.
If production tops 665 million tonnes it would likely exceed consumption, putting downward pressure on prices.
It notes that it is early in the year and much can change yet. However, the most likely catalyst for stronger wheat prices would be weather problems striking the U.S. corn crop.
There is no cushion to make up for a poor crop.
