The Canadian Wheat Board (CWB) has increased its export targets to 19 million tonnes of western Canadian wheat, durum and barley, making the most of a high-quality crop and positive world grain market trends.

“Although the grain markets have shown considerable price volatility, we expect good market conditions to hold at least until new crop supplies in the northern hemisphere become more certain,” 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 (PDF).

The CWB’s revised export target, up 1.5 million tonnes from projections at the beginning of the crop year, is well above the 10-year average of 16.9 million tonnes and 2.5 million tonnes above last year. By grain, CWB wheat exports are expected to reach 13.3 million tonnes, durum 4.2 million tonnes and barley 1.5 million tonnes. The CWB had exported 42 per cent of this grain by the end of the 2006 calendar year and expects to have exported 85 per cent by the end of May.

The large size of the 2006 crop, at 47.3 million tonnes of the six major grains, has increased the importance of ensuring rail capacity for CWB grains.

“The CWB sees good export demand for western Canadian products and we will be actively working on your behalf to ensure farmers receive adequate capacity from the railways,” Weisensel says.

Weisensel points to the best quality crop since 2003 and the tightest global supply-and-demand balance sheet in a decade, driving wheat prices in U.S. dollars to surpass 10-year highs in the first half of the marketing year. Production problems in key world grain producing regions outside Canada have reduced supply, while strong wheat demand has been buoyed by high imports into India. This is particularly supportive for prices in the mid- to lower-quality segments of the wheat market.

The durum market in 2006-07 has significantly improved after several years of oversupply. Last year saw a record CWB durum export program of 4.2 million tonnes. This year, a smaller durum crop was produced in North America, including the lowest U.S. durum acres since 1961. Demand is expected to exceed production, with positive impacts on prices.

For barley, the marketing environment has also improved. The U.S. produced the smallest barley crop since 1936, while Australia experienced a severe drought that dramatically reduced its barley crop. “On balance, marketing conditions are promising for both feed and malting barley in the coming season,” Weisensel says.

He cautions that there are factors that must be closely watched, including grain customers responding to high prices by delaying purchases, reducing inventory, looking for less-expensive alternatives and even cutting back on consumption. “Whenever we see a surge in prices, we can expect the market to react,” Weisensel says.

A more detailed market outlook is contained in the report, created each year as a special edition of the CWB’s Grain Matters newsletter for farmers.

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.