Canada Backs Off on Wheat Sales
The Canadian Wheat Board is being cautious about selling high-protein wheat because poor weather has foiled hopes for a top-quality crop, but has not withdrawn offers from the world market, a spokesperson told Reuters News Service last week.
"We are being cautious on high-protein sales until harvest is more complete, but we are selling top grades of wheat," CWB spokeswoman Louise Waldman said.
Rain, frost and snow have downgraded Canadian crops, and very little of Canada's spring wheat crop has been taken off the field, making it unclear what percentage of supplies will be top grade and protein levels.
The CWB has a monopoly on exports of wheat and barley from Western Canada and is one of the world's largest wheat sellers.
Sources familiar with the global wheat market told Reuters the CWB had temporarily withdrawn offers for its top grades of wheat.
"Until you get more harvest, it's very, very risky" to make new sales, one source explained, describing the situation as similar to the fall of 2002, when the CWB withdrew from the market because of harvest delays.
"Anything over 13.5 percent protein, they're not offering," another source said. "They don't know what the crop is."
Two other sources said they believed the CWB would have ample high-quality supplies to fill orders for long-term export buyers in Japan and Britain.
"It all depends on who you are," a source said. "For the ordinary destinations that aren't consistent buyers or buy strictly on price, they won't give them the high quality, or at least not until they have it in the bin."
Crop specialists believe much of Canada's crop has lost quality, but grade patterns are still unclear.
Dow Jones News Service on Friday reported that according to industry sources as much as 25% of Canada's 2004-05 (August-July) wheat crop could grade as feed quality, which would be well above both earlier expectations and the traditional 10%.
Editors note: Richard Brock, The Corn and Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.
To see more market perspectives, visit Brock's Web site at www.brockreport.com.