Durum edged higher in latest PRO
Saskatoon newsroom
The CWB released its latest Pool Return Outlook on Thursday. The April PRO showed wheat values steady with the March PRO. Milling grade durum values rose by $1 to $3 per tonne, depending on grade and protein levels. Malting barley values were unchanged.
Here is the CWB’s commentary that accompanied the PRO.
Wheat
“Spring wheat prices were supported by the Prospective Plantings report from the U.S. Department of Agriculture, released at the end of March, but futures markets have moved lower during April. While seeded spring wheat area will be smaller than expected, rapid planting has become the more dominant market factor, along with favourable growing conditions for U.S. winter wheat and increased corn acreage. Kansas City and Chicago wheat futures are down by more than 50 cents per bushel in the July contract, while Minneapolis futures remained unchanged from this time last month. The premium for Minneapolis futures over Chicago and Kansas City values continued to widen over the past month.
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“International values have moved sideways during the past month as the market begins the transition to purchasing new-crop winter wheat. Favourable weather has largely stabilized crops in the Black Sea region and Europe, which has placed some pressure on new-crop values.
“The PRO is the forecast of the final pool return. It includes the estimated value on grain that has already been priced, and the forecasted value on grain that has yet to be priced. The CWB prices wheat on a pace that is approved annually by the board of directors. The futures and options markets are used to moderate faster or slower cash sales to ensure pricing follows this pace. At the time of this PRO, the CWB has priced approximately 80 percent of the expected 2011-12 crop year deliveries of wheat. It is expected that the wheat pricing level will reach approximately 88 per cent by the end of May.
Durum
“The durum market continued to move sideways during the past month, despite a negative production outlook for the western Mediterranean growing region. Crops in Morocco and Spain have received some rainfall during the past month, but crop losses are still expected in both countries. Dryness in parts of North Dakota and Montana is raising some concerns about spring planting conditions, but most areas have enough moisture to plant the crop. In Western Canada, increased acreage reported by Statistics Canada will pressure durum values and is expected to keep the price spread between durum and spring wheat at historically narrow levels. Changes to the outlook for durum returns were minor this month due to the fact that a large portion of the pool is already sold.
Designated barley
“Ample supplies of old-crop malting barley in Canada, Australia and Argentina continue to pressure international malting barley prices. Prospects for the new crop remain positive, with spring planting underway in most areas of the Northern Hemisphere. Malting barley values are largely unchanged due to the fact that the pool is highly sold.”
