The Canadian Wheat Board has upped its Pool Return Outlook for wheat by $12 to $18 per tonne, but the board cautioned that further increases are unlikely because global wheat production in the 2011-2012 crop year will likely be the third highest ever.
In an August 25 release, the board explained that recent gains in U.S. futures markets supported the increased PRO for wheat, as the December contract on the Minneapolis Grain Exchange rose 70 cents over the last month.
As a result, the PRO for No. 1 CWRS 13.5 is now $321 per tonne ($8.74 per bushel), an increase of $14 from the July PRO.
The rise in futures prices and the PRO can partly be attributed to concerns over tightening U.S. corn stocks, the CWB noted. Stronger corn prices would encourage more feeding of wheat to livestock and should prompt growers to plant corn instead of wheat, reducing wheat acres in upcoming growing seasons.
There shouldn’t be a global shortage of wheat this year because global production is estimated at 670 million tonnes. A portion of the extra production will come from the Black Sea region, which means that low and mid quality wheat from Russia, Ukraine and Kazakhstan could flood the export market during the 2011-2012 crop year.
As for other board grains, durum rose $6-$16 over the July PRO. The CWB attributed the gain to expectations that this will be the smallest North American crop since 2006.
No. 1 CWAD 13.0 is now $417 per tonne ($11.35 per bu.)
The feed barley PRO rose to $252 per tonne, $12 over July, thanks to strong Middle East demand and strong corn prices, which triggers more barley usage.
The malt barley PRO didn’t change. It remains at $339 per tonne for two row barley.
