Old Crop Durum Up; All Else Down
WINNIPEG - May 23/02 - STAT -- The Canadian Wheat Board (CWB) boosted its current crop pool return estimate for durum wheat, but lowered values for all other products in both the 2001-02 and 2002-03 outlooks released today.
For the current market year, wheat values, depending on class and grade, range from CDN $3 to $6 per metric ton (MT) lower compared to the March outlook for 2001-02. Projected durum values are $5 to $8 MT higher. Feed barley values decreased by $3 MT, while designated barley values fell by $1 MT.
For the 2002-03 outlook, wheat values are $6 to $7 MT lower compared to the April outlook for 2002-03. Durum values are $2 MT lower. Feed barley values decreased by $10 MT, while designated barley values fell by $4 MT.
The latest outlook values are summarized in the following table:
CWB Pool Return Outlook
(CDN $ MT)
2002-03 2001-02 2001-02 2001-02 2001-02
Wheat Port Port Man. Sask. Alta.
No. 1 CWRS 14.5 215.00 166.55 163.75 172.07
No. 1 CWRS 13.5 202.00 209.00 160.55 157.75 166.07
No. 1 CWRS 12.5 194.00 204.00 155.55 152.75 161.07
No. 1 CWRS 11.5 187.00 199.00 150.55 147.75 156.07
No. 2 CWRS 13.5 197.00 203.00 154.55 151.75 160.07
No. 2 CWRS 12.0 186.00 195.00 146.55 143.75 152.07
No. 3 CWRS 171.00 188.00 139.55 136.75 145.07
No. 1 CPSR 170.00 180.00 131.55 128.75 137.07
No. 1 CPSW 171.00 190.00 141.55 138.75 147.07
No. 1 CWRW 164.00 177.00 128.55 125.75 134.07
No. 1 CWES 172.00 183.00 134.55 131.75 140.07
No. 1 CWSWS 185.00 209.00 160.55 157.75 166.07
CW Feed 133.00 147.00 98.55 95.75 104.07
Durum
No. 1 CWAD 14.5 264.00 228.15 218.14 220.59
No. 1 CWAD 13.0 244.00 259.00 223.15 213.14 215.59
No. 1 CWAD 12.5 241.00 258.00 222.15 212.14 214.59
No. 1 CWAD 11.5 235.00 254.00 218.15 208.14 210.59
No. 2 CWAD 11.5 226.00 248.00 212.15 202.14 204.59
No. 3 CWAD 204.00 231.00 195.15 185.14 187.59
No. 4 CWAD 212.00 176.15 166.14 168.59
Feed Barley
No. 1 CW 134.00 177.00 114.51 119.94 129.21
Designated Barley
SS CW Two-Row 180.00 212.00 160.00 156.37 163.44
Std. Sel. Two-Row 175.00 207.00 155.00 151.37 158.44
SS CW Six-Row 165.00 186.00 134.00 130.37 137.44
Std. Sel. Six-Row 160.00 181.00 129.00 125.37 132.44
Source: Canadian Wheat Board
In its analysis, the CWB said current crop wheat export values continue to weaken. Seasonally slow import demand, old crop supplies in a number of exporting countries and forecasts for larger than normal crops in most regions of the world continue to weigh on wheat prices. The recent strengthening in the Canadian dollar has also contributed to the weaker outlook this month.
Offshore durum values continue to remain fairly stable in spite of seasonally weak demand and competition from minor exporters. Limited exports from the United States, indications of smaller acreage in the United States and concerns over dryness on the Canadian Prairies have provided some price support.
Global feed barley export values in most locations continue to weaken as excess supplies from Eastern Europe, the Former Soviet Union, the European Union (DU) and Australia compete for weak demand. Export values in the Pacific Northwest ports have not been affected to the same degree given limited North American supplies.
Strong sales to date have limited the effect of weakening global designated barley values on the pool. Although demand continues to be relatively firm, large malting barley supplies in Australia, and, to a lesser extent, the DU, are keeping pressure on the market. Price movement in coming months will depend on how new crop prospects unfold.
Discussing the new crop situation, the CWB said although there are continuing concerns over dryness in Canada and the United States, generally good conditions in other wheat-producing countries have resulted in a considerably larger global production forecast for the coming year.
The United States Department of Agriculture's first 2002-03 wheat production estimate of 596 million MT would make this crop the second highest on record. Competition from minor exporters is expected to remain strong with countries such as India and Turkey projected to harvest bumper crops. The European Union (DU), facing a record wheat crop of 106 million MT, has re-introduced export subsidies on wheat in an attempt to sell its impending surplus.
While wheat stocks in the United States are projected to tighten even further in 2002-03, expectations for a small American export program and the signing of a very generous farm subsidy package, are also expected to cast a shadow on price prospects.
In the case of durum, poor crops in most of North Africa this spring should keep demand firm in the world's largest importing region. Increased output in the DU will reduce their durum import requirements and encourage exports. Improved crops in Syria and Turkey will keep export competition strong in 2002-03, maintaining pressure on durum prices. However, a smaller durum area in the United States, and poor conditions to date in Western Canada, if continued, should help provide some price support.
Feed barley prices continue to be under pressure as the DU battles to reclaim market share lost to Ukraine and other exporters in the Black Sea region. The DU has re-introduced export subsidies on feed barley, creating added pressure in an already beleaguered market. With global feed barley trade forecast to fall in 2002-03, the price outlook remains negative.
The outlooks for two- and six-row designated barley are lower this month as surpluses in the DU and Australia continue to push prices down. The introduction of DU export subsidies on feed barley is a negative development in an already struggling malting barley market, although global demand continues to be firm. Weather continues to be a major factor in the North American malting barley outlook. Prices will also be affected by the developments in Australia, where export supplies remain high and barley is currently being sown for harvest in November/December.
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