News Column

CWB Announces Latest PROs for 2014-15 Pools

February 27, 2014



WINNIPEG, Manitoba, Feb. 27 -- The Canadian Wheat Board issued the following news release:

CWB today released its Pool Return Outlooks (PROs) for the 2014-15 pools and Futures Choice pools. Compared to the last PRO release on January 23, projected returns for wheat in the Early Delivery, Annual and Winter Pools are $10, $10 and $9 per tonne higher, respectively. The projected return for canola in the Early Delivery Pool is $10 per tonne lower, while projected returns in Annual and Winter Pools are unchanged. Projected returns for durum, malting barley and field peas are also unchanged.

See table here: http://www.cwb.ca/news/84/cwb-announces-latest-pros-for-2014-15-pools

Note: PROs are provided as price indications based on current nearby and forward markets. They are calculated basis track west coast or Thunder Bay ports, net of all projected operating costs, including CWB's pool management fee. Volatile market conditions may affect the PROs significantly. PROs are not price guarantees and should not be confused with initial payments. Farmers should consider entering pool contracts as an excellent risk-management tool that provides a solid return from the entire pooling period.

To calculate pool returns backed off to the farm, farmers should factor in country deductions that they negotiate directly with grain handlers. These deductions may vary at different times of the year.

PRO commentary

2014-15 pools

General

PROs for 2014-15 are based on best available information today, understanding that the 2014 production season remains ahead and will ultimately determine pricing in the coming year. However, working on the assumption of an average crop next year, combined with the knowledge that carry out supplies are going to be large, the abundance of grain will continue to pressure Canadian prices in 2014-15. Global wheat and coarse grain ending stocks are still projected to increase in 2014-15, adding to the bearish tone of the 2014-15 markets. Partly offsetting some of these factors is the projected weaker Canadian dollar, which is expected to bolster pool returns somewhat. Wheat PROs are higher on account of stronger futures prices, while weaker futures are pressuring projected returns for canola.

General pool assumptions:

* Canadian dollar at 90 cents versus the U.S. dollar.

* Current forward futures structure for wheat and canola.

* The Early Delivery Pool reflects activity through the first half of the crop year, with sales to be executed by the end of February 2015 (farmer deliveries by the end of January).

* The Annual Pool reflects activity through the entire crop year, with sales to be executed by the end of August 2015 (farmer deliveries by the end of July).

* The Winter Pool reflects activity through the second half of the crop year, with sales to be executed by the end of August 2015 (farmer deliveries by the end of July).

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Source: Targeted News Service


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