Prairie farmers are in the final stages of harvesting what could be a record winter wheat crop of nearly one million tonnes.
While the final numbers aren’t in, Canadian Wheat Board officials expect the crop will exceed the previous record of 939,000 tonnes, established two years ago.
The crop size reflects a big jump in plantings in the fall of 2005, due in large part to winter wheat being seeded onto land that couldn’t be sown in the spring because of wet fields.
The crop also benefited from a mild winter and warm weather and abundant soil moisture early in the 2006 growing season.
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The quality looks good, with no significant fusarium and 60 to 70 percent is expected to grade No. 1.
The CWB has already issued calls for 50 percent of the Series A contracts for No. 1 and 2 CWRW and No. 1 and 2 CWRW 11.5 percent and higher for all train runs.
But all that good news is being tempered by early reports indicating that while the crop is of generally good quality, protein levels are disappointingly low.
The hot dry weather of the last couple of months would normally be expected to produce high protein levels, but Jake Davidson, executive manager for Winter Cereals Canada, says that doesn’t appear to be the case.
“The people I’ve been talking to have been getting barely over 10 or 11 percent,” he said. “The yields are reasonable, the quality’s good and it looks nice, but the protein is down. I’m baffled.”
Protein is crucial to the marketability of Canada Western red winter wheat. Farmers receive bonus payments on protein levels above 11.5 percent, which is the minimum required for the board’s CWRW Select contracts.
“We know the wheat board wants protein and we’re not giving it to them,” said Davidson.
Officials at the CWB say they’re withholding judgment on the protein content of the crop until they’ve seen more samples.
“It seems there is a wide range of protein content depending on things like variety and geographic areas,” said Bruce Burnett, the board’s director of weather and crop surveillance.
Generally speaking there is an inverse relationship between yield and protein in wheat; in other words, the higher the yield, the lower the protein and vice versa.
The value of protein is evident in the initial payments for 2006-07, with No. 1 CWRW priced at $107.50 a tonne, No. 1 CWRW 11.5 percent at $112.50, and No. 1 CWRW Select at $122.50 (less local freight and handling costs). The pool return outlook for No. 1 CWRW for 2006-07 is $168 a tonne, up from the 2005-06 PRO of $144 a tonne.
Rick Steinke, the CWB’s director of market analysis, said it’s too soon to project how much winter wheat will be moved into export markets this year or where it might be sold.
“We know there’s a million tonnes out there but we’ll have to wait and see the quality and how much is offered under our contract sign-up,” he said, adding the domestic feed market could also be strong this year.
At the same time, he said, the short-term outlook for moving winter wheat into export channels is positive and the general improvement in world wheat market fundamentals bodes well for the price.
Because winter wheat is lower in protein than spring wheat, it’s generally used in noodles and flatbreads. That includes markets like India, Indonesia, Thailand and Sri Lanka. Little is purchased by Canadian millers.
About five percent of the winter wheat crop is signed up under the board’s identity preserved CWRW Select contracts, which the agency is using to encourage farmers to grow superior varieties that better meet end users’ specifications.
The deadline for signing up for the Series A contract is Sept. 22.
