Winnipeg, Manitoba, Canada
January 16, 2008
The
CWB will export 17 million tonnes of wheat, durum and barley
this crop year, focusing its marketing strategy to take full
advantage of current record-high prices for grain in the
international marketplace.
“The CWB is maximizing returns through aggressive sales at
current high values prior to new-crop arrival,” Chief Operating
Officer Ward Weisensel says in the CWB’s annual Grain Marketing
Report, mailed to farmers this week and available at www.cwb.ca.
He encouraged farmers to commit their remaining wheat tonnage to
Series B before the January 31 sign-up deadline.
The CWB projects farmers in Saskatchewan will receive about $268
per tonne of top-quality spring wheat, an increase of 77 per
cent over last year; $417 for durum wheat, up 144 per cent from
last year; and and $223 for malting barley, an increase of 59
per cent from 2006-07. An updated projection will be released on
January 24.
The CWB’s 2007-08 export target includes 10.9 million tonnes of
wheat, 3.1 million tonnes of durum and three million tonnes of
barley. Fifty-one per cent of the program was exported by
December 31, 2007, with 90 per cent targeted for export by the
end of May 2008. “Given this situation, we will need to have
consistent delivery through the winter months and into spring,”
Weisensel says.
The current export target is 1.5 mllion tonnes below last year’s
exports, but close to the five-year average of 17.7 million
tonnes. Western Canada produced a smaller-than-average crop in
2007. Wheat seeded acres hit their lowest level in 30 years,
largely due to a wet spring that forced farmers in central and
northern growing regions to turn to shorter-season crops.
Overall, the 2007 harvest – while above average – was lower
quality than 2006, Weisensel says. A hot, dry July and cool, wet
harvest conditions in much of the Prairies reduced yields in
some areas and affected quality in others. The crop year began
on August 1, 2007 with the tightest stocks in 25 years. Tight
global supply drove prices to record levels, with demand
continuing to support high prices.
The Grain Marketing Report also notes that the strong Canadian
dollar has tempered farmer returns since wheat is traded on a
U.S.-dollar basis. If the exchange rate was still at 2002-03
values, Prairie farmers would have seen additional returns of
about $135 per tonne (in store Vancouver or St. Lawrence).
Record-high ocean freight rates have also taken a bite from
farmer returns, with the per-tonne bulk rate nearly quadrupling
over the past two years.
CWB Producer Payment Options (PPOs) continue to grow in
popularity among farmers, the report states. As of mid-November
2007, the number of producers using Fixed Price, Basis Payment
or Daily Price contracts or the Early Payment Option had reached
a record 22,938. The grain committed under a PPO comprised about
24 per cent of total production.
Controlled by western Canadian farmers, the CWB is the
largest wheat and barley marketer in the world. As one of
Canada's biggest exporters, the Winnipeg-based organization
sells grain to over 70 countries and returns all sales revenue,
less marketing costs, to farmers. |
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