Canada: CWB's June barley PROs 2008-09 increase across board

New 2008-09 pool return outlooks (PROs) for Prairie wheat, durum and barley are nearly all up from May, based partly on rising corn values, the Canadian Wheat Board reported on June 26.

The PRO for the CWB's Pool A for No. 1 Canada Western (CW) feed barley rose CA$10 per tonne from May levels to reach CA$245, while designated barleys (select CW two-row and six-row) were up CA$6 per tonne at CA$360 and CA$340 respectively.

High corn values are supporting feed barley prices, as is the latest StatsCan report, which shows Canada's barley seeded acres to be down "significantly" in favour of canola and wheat.

Furthermore, "although prospects for a larger European crop continue to weigh on prices, malting barley values in the European Union will remain supported by the fact that carry-in stocks are very low," the board wrote. More generally, "much uncertainty remains about the size and quality of the 2008-09 barley crop."

Pool B, 2007-08

The CWB on Thursday also released a 2007-08 PRO for No. 1 CW feed barley in Pool B, showing values unchanged from the previous month at CA $275 per tonne. The end of the crop year nears and sales for the pool are nearly complete, the CWB said.

"Tight global supply and weak nearby Saudi Arabian demand were the prevailing fundamentals as new-crop supply was anticipated, with expectations of a large European crop in 2008-09," the CWB wrote.

Feed barley
Feed barley prices in North America were supported by high corn values again this month. In addition, the latest Statistics Canada report released June 24 indicates that barley sown area in Canada this year is down significantly from last year, which will lower production. Seeding decisions were affected by higher early price projections for canola and wheat. A larger barley crop in Europe and the Black Sea continues to be forecast, partly offset by lower production in the Middle East due to dryness. Higher corn values will provide support for all feed grain prices.

Designated barley
Although prospects for a larger European crop continue to weigh on prices, malting barley values in the European Union (EU) will remain supported by the fact that carry-in stocks are very low. Lower barley area in Canada is also supportive of the market, but summer growing conditions will be key in determining malting quality and selection rates. Conditions in Australia have improved, although dryness in Argentina has delayed seeding. Much uncertainty remains about the size and quality of the 2008-09 barley crop.

27 June, 2008