Despite continuing "burdensome" world wheat supplies, wheat prices continue to see support from the corn and oilseed complexes, as shown in the Canadian Wheat Board's latest pool return outlook (PRO).
The board released its February PRO for the 2009-10 crop year late Thursday, showing wheat values ranging from unchanged to $5 per tonne higher compared to the January outlook.
Durum and malting barley values were unchanged in the February 2009-10 PRO, while No. 1 CW feed barley (Pool B) dropped to $150 per tonne ($3.27 per bushel), down $2 per tonne from January.
"Global wheat supplies remain burdensome," the CWB said in its outlook Thursday, citing the U.S. Department of Agriculture's global supply and demand data, which shows "growth in consumption has failed to match production increases" and ending stocks have thus jumped to 196 million tonnes.
But wheat generally remains "strongly influenced" by corn and soybeans, for which demand has done a better job of keeping up with production increases, the CWB said.
Also, the board noted, investment dollars continue to flow into commodity markets. "The U.S. dollar has given back some of its recent gains and this has been favourable to commodity prices, but there appears to be no end to foreign exchange volatility in the short-term."
The CWB added that it has so far priced about 65 per cent of its expected 2009-10 deliveries of wheat, and expects that level to reach 75 per cent by the end of March.
Among wheat classes, CW feed-grade wheat remained flat in the PRO at $146 per tonne ($3.97/bu.). Increases ranged from $1 per tonne for No. 1 CW red spring, 12.5 and 11.5 per cent protein (rising to $225 and $212 per tonne respectively) to $5 per tonne for No. 2 CWRS, 13.5 per cent ($238 per tonne) and No. 1 Canada Prairie Spring Red ($195 per tonne).
Durum markets remain "heavily burdened by supply," the CWB said, and market fundamentals remain under pressure. The euro's recent depreciation has cut into EU import demand, as has the potential for increased durum acres in the EU.
Durum values in the February PRO thus remain flat, with values ranging from $210 per tonne ($5.72 per bushel) for No. 1 CW amber durum (14.5 per cent protein) to $146 per tonne for No. 5 CWAD.
Quality remains an issue in the malting barley market, although overall supplies are seen as "adequate," the board said. Australian crop results were "compromised" by adverse harvest conditions, thus incremental demand in China will be available for the EU or Canada, although the EU's larger supplies and a weaker euro are seen as giving it an edge in the Chinese market.
The CWB's values for designated barley thus remained flat in its February PRO, with Select CW two-row and six-row at $211 and $193 per tonne ($4.59 and $4.20 per bushel) respectively.
Challenges in the feed barley market include "more than enough" supply in the Black Sea and EU barley-growing regions for the Middle East markets, plus an "overabundance" of exportable feed-grade barley in Australia due to a poor-quality barley harvest.
Corn production in the U.S. "remains at issue due to the late harvest," the CWB noted.
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