Wheat keeps climbing in December PROs

Even tighter world wheat supplies have spurred a jump of $41 to $52 per tonne in the Canadian Wheat Board’s latest pool return outlooks (PROs) for 2007-08.

On top of Statistics Canada’s recent report of reduced Canadian wheat supplies, production shortfalls in the U.S, Europe and Australia and export restrictions from Russia and Ukraine come new wheat export restrictions from Argentina, the CWB reported Thursday.

“Relief is expected in late spring and early summer 2008, but without record world wheat production next year, the market will remain historically tight,” the CWB wrote.

Minneapolis March 2008, Kansas City and Chicago wheat futures rose $1.95, $1.56 and $1.26 per bushel respectively since November’s PRO, driven by robust U.S. sales tightening supplies further. A weaker forecast for the Canadian dollar also supports the projected returns for Prairie farmers, the board noted.

The PROs for No. 1 Canada Prairie Spring Red, No. 1 Canada Prairie Spring White, No. 1 Canada Western Red Winter and No. 1 Canada Western Extra Strong rose $41 per tonne, while the PRO for No. 1 Canada Western Soft White Spring rose $52, to $322 per tonne.

Durum

Durum PROs are up $9 (No. 1 CWAD 14.5 and 13.0, for example) to $13 (No. 2 CWAD 13.0 and 11.5) per tonne. The PRO for No. 5 CWAD rose $40, to $270 per tonne.

Durum production is expected to rise in 2008-09, but because of low beginning stocks, the market is expected to remain fundamentally tight, which will support high prices throughout the coming year, the CWB wrote.

Barley

Feed barley PROs rose $10 per tonne to $264 and $255 for No. 1 Canada Western, pools A and B respectively. All malting barley values, however, are unchanged from the November PRO.

Sluggish world demand pressured malting barley prices against support from limited supplies caused by lower production and quality issues in Canada, Europe, Australia and Argentina, the CWB said. Global feed barley fundamentals remain tight and feed grain prices globally are supported by the rapid pace of export for the record U.S. corn crop, and by limits on Ukrainian and Russian barley exports.