Neil Townsend, market analyst with the CWB, at the GrainWorld conference in Winnipeg.

 

 

The Canadian Wheat Board is forecasting significantly higher pool values for wheat and barley in its first Pool Return Outlook for the new crop year .

2011-12 Number 1 CWRS wheat at 13.5 percent protein is forecast to finish at $352 per tonne or $9.58 per bushel in store Vancouver or St. Lawrence. That's compared to $236 per tonne or $6.42 per bushel in the latest PRO for the 2010-11 crop year.

Neil Townsend, market analyst with the CWB, told attendees at the GrainWorld conference in Winnipeg that the world wheat supply-and-demand balance is expected to tighten in the 2011-12 marketing year. Production is estimated at 653.5 million tonnes, but supplies are expected to drop by 15.2 million tonnes due to lower carry-in stocks.

He says it remains to be seen whether when and how the rally in the grain market over the last year will end.

"It depends on production. If a large production result is there, I think we quickly see the market react as it did in 2007-08. If they produce 670 plus million tonnes of wheat. Then you have a problem where wheat isn't tight. It's loose again then," says Townsend. "The dampening of prices though won't be as dramatic. I think we're at a peak right now as you can see by our estimate. We're lower than the current market, so we have it coming off a little bit which reflects what my opinion and other people's opinions are."

The initial Pool A feed barley PRO is $257 per tonne, compared with the current year forecast of $150 per tonne.

The PRO for two-row designated barley is $337 per tonne, or $7.34 per bushel. The six-row PRO is $320 per tonne, or $6.97 per bushel.

~ Tuesday, March 1, 2011 ~