Tight stocks drive record highs for durum: PRO
| 2 min read
By FBC staff
The Canadian Wheat Board boosted its 2007-08 pool return outlooks (PROs) $27 per tonne for milling durum on Thursday, reflecting what it calls “extremely tight” stocks worldwide.
Milling wheat PROs dropped $2 to $5, reflecting a “highly volatile” trend as world wheat prices come down off record highs from previous weeks, the CWB said. Feed and malting barley PROs remained flat.
In durum, PROs for No. 1 CWAD 14.5 rose to $473 per tonne from $446 in September. At the other end of the range, No. 4 CWAD rose from $410 to $437 per tonne.
The U.S. is effectively out of the international durum market, as the U.S. Department of Agriculture estimates the country has sold its entire durum export program for the year, the CWB said. Tight world supplies, due to a wet European harvest and dry conditions in North American durum-growing regions, are expected to support high prices throughout the crop year.
In milling wheat, No. 1 CWRS 14.5 dropped $5 per tonne to $298, while No. 4 CWRS dropped $2 to $256. No. 1 soft white spring dropped $4 to $276, while CW feed wheat remained flat at $220 per tonne.
December Minneapolis wheat futures have dropped almost 60 cents per bushel since the September PRO, while Kansas City futures dropped nearly 90 cents, the CWB said. Prices have also come under pressure from a slug of Russian exports before that country’s new tax on exports takes effect Nov. 12. The U.S. has already sold 89 per cent of its 2007-08 export program, up from 49 per cent at this time last year.
Wheat market watchers are keeping a close eye on the southern hemisphere, the board said, as the size of Australia’s crop continues to shrink and Argentina reports some “very timely” rainfall, improving its wheat crop prospects.
No. 1 CW feed barley in Pool A remained flat at $254 per tonne in the October PROs, Standard Select two-row malting barley stands pat at $285 and Standard Select six-row at $256, the board announced.
Global feed barley fundamentals have “stabilized somewhat” since the September PRO, the board said, noting corn continues to create a price ceiling for barley on the feed market. The European Union reports a small malting barley surplus, but expectations of tight global supplies, driven in part by quality concerns in Canada, the U.S. and Australia, are still expected to keep the market firm.