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October outlook 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 mid-October PRO, projected returns are up significantly for canola, durum and soybeans. Wheat and peas are slightly higher as well. Projected returns for wheat Futures Choice pools are up, soybean Futures Choice is lower and canola is unchanged.

G3 PRO (per tonne)
In store Vancouver or Thunder Bay
Early Delivery Pool Annual Pool
Wheat 27-Oct 13-Oct 27-Oct 13-Oct
1 CWRS 14.5 302.00 292.00 302.00 290.00
1 CWRS 14.0 297.00 289.00 297.00 287.00
1 CWRS 13.5 292.00 286.00 292.00 284.00
1 CWRS 13.0 287.00 283.00 287.00 281.00
1 CWRS 12.5 283.00 278.00 283.00 276.00
1 CWRS 12.0 278.00 273.00 278.00 271.00
1 CWRS 11.5 273.00 268.00 273.00 266.00
2 CWRS 14.5 299.00 289.00 299.00 287.00
2 CWRS 14.0 294.00 286.00 294.00 284.00
2 CWRS 13.5 289.00 283.00 289.00 281.00
2 CWRS 13.0 284.00 280.00 284.00 278.00
2 CWRS 12.5 279.00 275.00 279.00 273.00
2 CWRS 12.0 274.00 270.00 274.00 268.00
2 CWRS 11.5 269.00 265.00 269.00 263.00
3 CWRS 13.0 272.00 269.00 272.00 267.00
3 CWRS 12.5 268.00 264.00 268.00 262.00
3 CWRS 12.0 264.00 259.00 264.00 257.00
3 CWRS 11.5 260.00 254.00 260.00 252.00
 
Durum
1 CWAD 13.0 370.00 337.00 380.00 337.00
1 CWAD 12.5 369.00 335.00 378.00 335.00
1 CWAD 11.5 366.00 330.00 375.00 330.00
1 CWAD 363.00 327.00 372.00 327.00
2 CWAD 13.0 356.00 328.00 365.00 328.00
2 CWAD 12.5 354.00 325.00 364.00 325.00
2 CWAD 11.5 351.00 321.00 361.00 321.00
2 CWAD 348.00 317.00 358.00 317.00
3 CWAD 13.0 325.00 312.00 335.00 312.00
3 CWAD 11.5 322.00 311.00 331.00 311.00
3 CWAD 319.00 306.00 329.00 306.00
 
Canola
1 Canada 522.00 492.00 526.00 496.00
 
Field Peas
2 Canada Yellow 315.00 310.00 315.00 310.00
 
Soybeans
2 Canada Yellow 470.00 443.00
     
Futures Choice Early Delivery Pool Annual Pool
27-Oct 13-Oct 27-Oct 13-Oct
Wheat Minneapolis March 2017 Basis Minneapolis July 2017 Basis
1 CWRS 14.5 35.00 30.00 35.00 30.00
1 CWRS 14.0 32.00 27.00 32.00 27.00
1 CWRS 13.5 28.00 24.00 28.00 24.00
1 CWRS 13.0 24.00 21.00 24.00 21.00
1 CWRS 12.5 19.00 16.00 19.00 16.00
1 CWRS 12.0 14.00 11.00 14.00 11.00
1 CWRS 11.5 9.00 6.00 9.00 6.00
2 CWRS 14.5 32.00 27.00 32.00 27.00
2 CWRS 14.0 29.00 24.00 29.00 24.00
2 CWRS 13.5 25.00 21.00 25.00 21.00
2 CWRS 13.0 20.00 18.00 20.00 18.00
2 CWRS 12.5 16.00 13.00 16.00 13.00
2 CWRS 12.0 11.00 8.00 11.00 8.00
2 CWRS 11.5 6.00 2.00 6.00 2.00
3 CWRS 13.0 9.00 7.00 9.00 7.00
3 CWRS 12.5 5.00 2.00 5.00 2.00
3 CWRS 12.0 0.00 -3.00 0.00 -3.00
3 CWRS 11.5 -4.00 -8.00 -4.00 -8.00
     
Canola ICE March 2017 Basis ICE July 2017 Basis
1 Canada 8.00 8.00 8.00 8.00
     
Soybeans

Chicago March 2017 Basis

2 Canada Yellow -20.00 -16.00

 

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. The 2016 harvest is approximately 85 per cent complete across Western Canada. Progress has slowed to a crawl due to the excess moisture that fell across large areas of Alberta and Saskatchewan.

While harvest delays are providing some support to prices in Western Canada, the bigger drivers of improved pricing are international in scope. Strong buying demand has been pulling prices higher for all grains and oilseeds despite worldwide production coming in very close to expectations. On the oilseed front, the Malaysian palm oil market has strengthened and US soybean exports have been very good to date. The delayed harvest in Canada is providing further strength to canola in addition to those two factors. In addition, the Canadian dollar has continued its gradual weakening trend and helping Canadian dollar-denominated returns.

Compared to the PRO released October 13, wheat returns are up $3 to $10 per tonne, durum returns are higher by $11 to $45 per tonne. Canola returns followed futures higher by $30 per tonne, pea values are up $5 per tonne and soybeans rose by $27 per tonne.   

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 $28 per tonne. For the wheat Futures Choice Annual Pool, the projection for 1 CWRS 13.5 is the July 2017 futures plus $28 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 $20 per tonne for the Futures Choice Early Delivery Pool at in-store position. 

General pool assumptions:

  • Canadian dollar at 74.7 cents versus the U.S. dollar.
  • Current forward futures structure for wheat, canola and soybeans.
October 27, 2016