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2015-16 Winter PROs mixed in latest outlook

Winnipeg – G3 today released updated Pool Return Outlooks (PROs) for the 2015-16 Winter Pool and Futures Choice Winter Pool. Compared to the last PRO released in February, projected returns for wheat are $3 per tonne lower, while canola projected returns are $7 per tonne higher. Projected returns for durum and the Futures Choice Pools (wheat and canola) remain unchanged.

G3 PRO (per tonne)
In store Vancouver or Thunder Bay
Winter Pool
Wheat 24-Mar 25-Feb
1 CWRS 14.5 263.00 266.00
1 CWRS 14.0 260.00 263.00
1 CWRS 13.5 257.00 260.00
1 CWRS 13.0 254.00 257.00
1 CWRS 12.5 251.00 254.00
1 CWRS 12.0 248.00 251.00
1 CWRS 11.5 245.00 248.00
2 CWRS 14.5 260.00 263.00
2 CWRS 14.0 257.00 260.00
2 CWRS 13.5 254.00 257.00
2 CWRS 13.0 251.00 254.00
2 CWRS 12.5 248.00 251.00
2 CWRS 12.0 245.00 248.00
2 CWRS 11.5 242.00 245.00
3 CWRS 13.0 239.00 242.00
3 CWRS 12.5 237.00 240.00
3 CWRS 12.0 234.00 237.00
3 CWRS 11.5 232.00 235.00

Durum
1 CWAD 13.0 333.00 333.00
1 CWAD 12.5 333.00 333.00
1 CWAD 11.5 331.00 331.00
1 CWAD 331.00 331.00
2 CWAD 13.0 328.00 328.00
2 CWAD 12.5 327.00 327.00
2 CWAD 11.5 326.00 326.00
2 CWAD 325.00 325.00
3 CWAD 13.0 314.00 314.00
3 CWAD 11.5 312.00 312.00
3 CWAD 311.00 311.00
4 CWAD 297.00 297.00

Canola
1 Canada 497.00 490.00

Futures Choice

Winter Pool
24-Mar 25-Feb

Wheat
Minneapolis July
2016 Basis
1 CWRS 14.5 13.00 13.00
1 CWRS 14.0 10.00 10.00
1 CWRS 13.5 7.00 7.00
1 CWRS 13.0 4.00 4.00
1 CWRS 12.5 1.00 1.00
1 CWRS 12.0 -2.00 -2.00
1 CWRS 11.5 -5.00 -5.00
2 CWRS 14.5 10.00 10.00
2 CWRS 14.0 7.00 7.00
2 CWRS 13.5 4.00 4.00
2 CWRS 13.0 1.00 1.00
2 CWRS 12.5 -2.00 -2.00
2 CWRS 12.0 -5.00 -5.00
2 CWRS 11.5 -8.00 -8.00
3 CWRS 13.0 -11.00 -11.00
3 CWRS 12.5 -13.00 -13.00
3 CWRS 12.0 -16.00 -16.00
3 CWRS 11.5 -18.00 -18.00


Canola

ICE July
2016 Basis
1 Canola 22.00 22.00

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 G3’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
2015-16 pools

Wheat 
Minneapolis futures have been trending upwards since the last PRO release as a result of winterkill concerns in the U.S. HRW areas. Offsetting the stronger futures is the strengthening Canadian dollar, which has strengthened to a projected 75 cents from 73 cents projected in February. Current Minneapolis wheat futures prices for the May 2016 contract through to the July 2016 contract are trading in the range of US$5.10 to US$5.20 per bushel, which are significantly higher compared to the last PRO release.

Given current PRO assumptions, farmers in the 2015-16 Futures Choice Winter Pool can expect to achieve a final return for 2 CWRS 14.0 in-store port position made up of the July 2016 futures value they lock in plus $7 per tonne.

Durum
Projected returns for the durum Winter Pool are unchanged this month. The pool is fully sold, however PROs could fluctuate depending on execution of both producer deliveries and sales.

Canola
PRO values for the canola Winter Pool trended higher this month due to stronger futures. The main drivers pushing the canola futures higher are stronger palm oil futures and delays to policy changes by the Chinese Government. Offsetting some of the gains is the stronger Canadian dollar. Current canola futures for the May and July 2016 contracts are trading in the range of $470 to $475 per tonne, which is higher compared to the last PRO release. 

Given current PRO assumptions, farmers in the 2015-16 Futures Choice Winter Pool can expect to achieve a final return for 1 Canada Canola in-store port position made up of the July 2016 futures value they lock in plus $22 per tonne.

General pool assumptions:

  • Canadian dollar at 75 cents versus the U.S. dollar.
  • Current forward futures structure for wheat and canola.
March 24, 2016