CWB Slashes PROs

WINNIPEG - Oct 23/08 - SNS -- The Canadian Wheat Board (CWB) continued to decrease its price outlook for the 2008-09 marketing year, sharply reducing projected returns for all marketing pools.

Its its October Pool Return Outlook (PRO) was down CDN $24 per metric ton (MT) milling wheat, when compared to last month's PRO, while milling durum values are down $37. Feed barley is down $5 and designated barley remains unchanged from the mid-October PRO.

"The decline in the Canadian dollar has helped support all four pool return outlooks, as has a dramatic drop in ocean freight rates. The Canadian dollar is at its lowest levels in four years and ocean freight rates are now approaching six year lows," the CWB said.

"The uncertainty and concern in financial, equity and commodity markets continues to impact the buying behavior of grain customers. In general, grain processors are attempting to reduce risk exposure. In the short term, this results in reduced inventories, hand-to-mouth purchasing and delays in capital investments. Weaker demand at a time of record world wheat supply is an underlying factor in the dramatic declines we have seen in grain market prices. In the current environment of global economic uncertainty, grain market price volatility has the potential to continue to significantly impact forecast pool returns."

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