Disappointing PRO

The difficult growing season in Western Canada has moved many of the grain markets, but wheat, durum and barley prices remain stubbornly depressed. In the latest Pool Return Outlook from the Canadian Wheat Board, new crop wheat with good protein is up a little bit, but durum and barley are unchanged from last month. The CWB points out that the previous two marketing years saw the largest and second largest global production of wheat on record. The 2010-11 marketing year is virtually certain to be the third largest production of all time. Canada is a huge player on the world durum market, but despite our big drop in durum acres, the overall supply of durum is expected to be adequate for the year ahead. Although world stocks are tightening due to our production drop, global values are constrained by an abundance of durum in Europe, along with the depreciation of the euro. It is also EU stocks that are overhanging the designated barley market. So while canola, lentils, canaryseed, oats and even field peas have strengthened in price in recent weeks, there isn’t much good news in the Pool Return Outlook. I’m Kevin Hursh.