Now that it has a better idea of how the rest of the marketing year will play out, the Canadian Wheat Board has recommended an increase in initial payments.
The board made the announcement last week at the same time it released the January Pool Return Outlook, but did not publicly identify which grains it is recommending for the payment boost.
The price forecast for most board grains was unchanged, but Derek Sliworsky, CWB marketing manager, said it has more confidence in its assessment of the rest of the marketing year.
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“We’ve been able to put on more sales in the past month, which has decreased the level of risk in each of the pool accounts,” he said.
“Also, there is a bit more certainty in our estimates. Last month, we still were unsure where U.S. (winter wheat) acreage estimates were going to shake out. It was confirmed they are down, but it was offset by the high stock numbers that are putting a lid on the market right now.”
On the positive side of the ledger, Sliworsky agrees with the International Grains Council forecast of falling world wheat stocks by the end of the 1999-2000 crop year.
The biggest news in an otherwise quiet wheat market is the weather in China. Some reports say northern regions are experiencing a severe drought while others say the situation isn’t so bad.
“We follow it and look every day to see if they are getting rainfall. Right now it does look dry in the northern wheat growing area,” Sliworsky said.
He added that an increase in the feed barley PRO was due to steady demand from Japan that the board has had difficulty meeting because farmers are saving their feed for the stronger priced domestic market.
Although Canada is not directly competing against European barley, the world market is benefiting from European export subsidies that are much lower than they were earlier in the crop year.
At the Winnipeg Commodity Exchange, barley futures prices were not affected by the change in the PRO. Warm prairie weather had traders focused on expectations of reduced feed demand from livestock.
