WINNIPEG (Reuters) – The Canadian Wheat Board expects to export nine percent less grain this crop year compared to last year.
Chief operating officer Ward Weisensel said the crop will be smaller than last year because of poor early growing season weather.
However, results will be better than what was expected in midsummer because of a record-hot September.
“It has been a volatile year without question,” Weisensel said.
“We were very, very fortunate to see the September that we saw.”
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The board expects to export at least 17.5 million tonnes of grain in 2009-10, up from a July 30 estimate of 15.5 million tonnes. In 2008-09, it exported 19.3 million tonnes of grain, the highest volume in nine years.
The board expects wheat exports of 12.5 million tonnes, down from 13.3 million tonnes last year, with durum exports of 3.5 million tonnes, in line with 3.6 million tonnes in 2008-09.
A new European Union tariff of $25 per tonne on Canadian durum is a concern for the board. Italy was the CWB’s fourth largest durum export market last year.
Barley exports should total 1.5 to 1.7 million tonnes, down from 2.4 million tonnes last year, depending on feed barley prices. Most of that will be malting barley. Weisensel said Canadian feed barley prices are higher than international values.
The Canadian dollar, which flirted with parity against the U.S. dollar this month before dropping to the 92.5 cent US level, could reduce export targets if it moves past the mid-90 cent level, Weisensel said.
“It could go either way at this stage, but it’s hard to imagine it going beyond par,” with the U.S. currency, he said.
A rising dollar makes Canadian grain exports less attractive.
The global wheat crop is smaller than last year, but still large. Weisensel said the market is pricing high-quality, high-protein wheat at a premium.
Protein levels of western Canadian wheat should average 13.2 percent, which he said is reasonable but lower than the board would like.
However, quality has improved, with 78 percent of Canada Western Red Spring wheat and durum falling into the top two grades, compared with the normal level of 65 percent.
World importers are buying grain as needed, rather than building inventory, because of earlier falling prices, but that may change with prices stabilizing, Weisensel said.
The board expects a western Canadian spring wheat crop of about 17 million tonnes, down from 18 million tonnes. Durum production is 5.2 to 5.3 million tonnes, compared with 5.5 million tonnes last year. The barley crop totals 8.9 million tonnes, down from 11 million tonnes a year ago.
