Higher protein milling wheat grades of hard red spring wheat are up slightly in the CWB May 2012 Pool Return Outlook for the 2011-12 crop year.
Wheat values generally range from unchanged to up $2 per tonne from last month’s PRO, depending on class, grade and protein level.
Durum and malting barley values were unchanged.
No. 1 CW red spring wheat 13.5 percent protein is up $2 to $321 per tonne at port, or $8.74.
No. 1 CW red spring wheat 11.5 percent protein is unchanged at $269 per tonne at port, or $7.32 per bushel.
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The following is the CWB commentary that accompanied the PRO:
Wheat
Spring wheat prices were mixed over the past month, with a steep decline followed by a significant rally during the past week. The net result is that new crop futures are relatively unchanged from last month. Kansas City and Chicago markets rallied by approximately 50 cents per bushel and corn dropped by 10 to 15 cents per bushel, depending on the contract month. The market rallies in Kansas City and Chicago were the result of increasing concerns about global wheat production. Unfavourable weather in Europe, the United States and the Black Sea region has lowered production potential and helped tighten projected ending stocks.
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 85 per cent of the expected 2011-12 crop year deliveries of wheat. It is expected that the wheat pricing level will reach approximately 97 per cent by the end of July.
Durum
The durum market was largely unchanged during the past month, as prices follow spring wheat values. Although crop losses in the Mediterranean basin are price supportive, harvest activity in the region is gaining momentum. The ongoing harvest will slow demand for imports from the region. Planting of the North American crop is nearing completion, although delays in Canada will likely cause some reduction in acreage from initial intentions.
Designated barley
The malting barley market is beginning to focus on new-crop supplies as Europe moves closer to the barley harvest. Spring barley area increased in Europe this year, which should result in a larger supply of selectable barley. Nearby prices continue to be pressured by ample supplies of old-crop malting barley in Australia and good new-crop prospects in EU, U.S. and Argentina. Malting barley values are largely unchanged due to the fact that the pool is highly sold.
