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October update for 2016-17 Early Delivery and Annual Pools

DATE:              October 13, 2016                                                                   
RELEASE:         Immediate

October update for 2016-17 Early Delivery and Annual Pools

Winnipeg – G3 Canada Limited today released updated Pool Return Outlooks (PROs) for the 2016-17 Early Delivery and Annual pools, including Futures Choice Pools. Compared to the last PRO released in September, projected returns are up significantly for all pools with the exception of soybeans. Projected returns for wheat Futures Choice pools are up, while canola and soybean Futures Choice returns are projected lower.

G3 PRO (per tonne)
In store Vancouver or Thunder Bay
Early Delivery Pool Annual Pool
Wheat 13-Oct 22-Sep 13-Oct 22-Sep
1 CWRS 14.5 292.00 263.00 290.00 264.00
1 CWRS 14.0 289.00 260.00 287.00 261.00
1 CWRS 13.5 286.00 257.00 284.00 258.00
1 CWRS 13.0 283.00 254.00 281.00 255.00
1 CWRS 12.5 278.00 249.00 276.00 250.00
1 CWRS 12.0 273.00 244.00 271.00 245.00
1 CWRS 11.5 268.00 239.00 266.00 240.00
2 CWRS 14.5 289.00 260.00 287.00 261.00
2 CWRS 14.0 286.00 257.00 284.00 258.00
2 CWRS 13.5 283.00 254.00 281.00 255.00
2 CWRS 13.0 280.00 251.00 278.00 252.00
2 CWRS 12.5 275.00 246.00 273.00 247.00
2 CWRS 12.0 270.00 241.00 268.00 242.00
2 CWRS 11.5 265.00 236.00 263.00 237.00
3 CWRS 13.0 269.00 240.00 267.00 241.00
3 CWRS 12.5 264.00 235.00 262.00 236.00
3 CWRS 12.0 259.00 230.00 257.00 231.00
3 CWRS 11.5 254.00 225.00 252.00 226.00

Durum
1 CWAD 13.0 337.00 302.00 337.00 298.00
1 CWAD 12.5 335.00 300.00 335.00 296.00
1 CWAD 11.5 330.00 295.00 330.00 291.00
1 CWAD 327.00 292.00 327.00 288.00
2 CWAD 13.0 328.00 293.00 328.00 289.00
2 CWAD 12.5 325.00 290.00 325.00 286.00
2 CWAD 11.5 321.00 286.00 321.00 282.00
2 CWAD 317.00 282.00 317.00 278.00
3 CWAD 13.0 312.00 277.00 312.00 273.00
3 CWAD 11.5 311.00 276.00 311.00 272.00
3 CWAD 306.00 271.00 306.00 267.00

Canola
1 Canada 492.00 481.00 496.00 483.00

Field Peas
2 Canada Yellow 310.00 297.00 310.00 296.00

Soybeans
2 Canada Yellow 443.00 453.00

Futures Choice
Early Delivery Pool Annual Pool
13-Oct 22-Sep 13-Oct 22-Sep
Wheat Minneapolis March 2017 Basis Minneapolis July 2017 Basis
1 CWRS 14.5 30.00 16.00 30.00 11.00
1 CWRS 14.0 27.00 13.00 27.00 10.00
1 CWRS 13.5 24.00 10.00 24.00 7.00
1 CWRS 13.0 21.00 7.00 21.00 4.00
1 CWRS 12.5 16.00 2.00 16.00 -2.00
1 CWRS 12.0 11.00 -3.00 11.00 -7.00
1 CWRS 11.5 6.00 -8.00 6.00 -12.00
2 CWRS 14.5 27.00 13.00 27.00 10.00
2 CWRS 14.0 24.00 10.00 24.00 7.00
2 CWRS 13.5 21.00 7.00 21.00 4.00
2 CWRS 13.0 18.00 4.00 18.00 1.00
2 CWRS 12.5 13.00 -1.00 13.00 -5.00
2 CWRS 12.0 8.00 -6.00 8.00 -10.00
2 CWRS 11.5 2.00 -12.00 2.00 -15.00
3 CWRS 13.0 7.00 -7.00 7.00 -10.00
3 CWRS 12.5 2.00 -12.00 2.00 -16.00
3 CWRS 12.0 -3.00 -17.00 -3.00 -21.00
3 CWRS 11.5 -8.00 -22.00 -8.00 -26.00

Canola
ICE March 2017 Basis ICE July 2017 Basis
1 Canada 8.00 12.00 8.00 11.00

Soybeans
Chicago March 2017 Basis
2 Canada Yellow -16.00 -12.00


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
2016-17 pools

 PROs for 2016-17 are based on the latest information available as the 2016 harvest is now over 80 per cent complete across Western Canada. It has and continues to be a mixed harvest experience with yield results generally close to projections but with the rain and snow that fell across a wide swath last week, the balance of the harvest will be a drawn out and difficult affair. In some cases, this may slightly delay the movement and marketing of grain off the farm due to harvest being incomplete, time for quality testing and now even yards that are not accessible due to rain.

Compared to September, the wheat market has recovered on all fronts.  The wheat returns are up $26 to $29 per tonne due to higher futures, stronger export demand and even the Canadian dollar chipped in with slight weakness over the past few weeks.  Durum returns are likewise higher by $35 to $39 per tonne thanks mainly to stronger world durum prices as well as the weaker Canadian dollar. Canola returns have followed futures higher by $11 to $13 per tonne; pea values are somewhat stronger as well by $13 to $14 per tonne. Soybeans are the outlier with a drop of $10 per tonne mainly due to softer futures.   

Given current PRO projections, producers in the 2016-17 wheat Futures Choice Early Delivery Pool would anticipate a final return for 1 CWRS 13.5 in-store port position made up of the March 2017 futures value they lock in plus $24 per tonne. For the wheat Futures Choice Annual Pool, the projection for 1 CWRS 13.5 is the July 2017 futures plus $24 per tonne. 

For the canola Futures Choice Pools, the projected return is the March 2017 futures locked in plus $8 per tonne for the Futures Choice Early Delivery Pool and the July 2017 futures plus $8 per tonne for the Futures Choice Annual Pool at in-store position. 

For the soybean Futures Choice Pools, the projected return is the March 2017 futures locked in less $16 per tonne for the Futures Choice Early Delivery Pool at in-store position. 

General pool assumptions:

  • Canadian dollar at 75.7 cents versus the U.S. dollar.
  • Current forward futures structure for wheat, canola and soybeans.
October 13, 2016