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September outlook for 2017-18 Annual Pools

Winnipeg – G3 Canada Limited released updated Pool Return Outlooks (PROs) for the 2017-18 Annual Pools today. Compared to the mid-September PRO release, projected returns are $15, $5 and $2 per tonne higher for wheat, durum and canola, respectively.

G3 PRO (per tonne)
In store Vancouver or Thunder Bay
Annual Pool
Wheat 28-Sep 15-Sep
1 CWRS 14.5 293.00 278.00
1 CWRS 14.0 289.00 274.00
1 CWRS 13.5 285.00 270.00
1 CWRS 13.0 278.00 263.00
1 CWRS 12.5 271.00 256.00
1 CWRS 12.0 264.00 247.00
1 CWRS 11.5 257.00 242.00
2 CWRS 14.5 291.00 276.00
2 CWRS 14.0 287.00 272.00
2 CWRS 13.5 283.00 268.00
2 CWRS 13.0 276.00 261.00
2 CWRS 12.5 269.00 254.00
2 CWRS 12.0 262.00 247.00
2 CWRS 11.5 255.00 240.00
3 CWRS 13.0 272.00 257.00
3 CWRS 12.5 265.00 250.00
3 CWRS 12.0 258.00 243.00
3 CWRS 11.5 251.00 236.00

Durum
1 CWAD 13.0 331.00 326.00
1 CWAD 12.5 330.00 325.00
1 CWAD 11.5 328.00 323.00
1 CWAD 326.00 321.00
2 CWAD 13.0 321.00 316.00
2 CWAD 12.5 320.00 315.00
2 CWAD 11.5 318.00 313.00
2 CWAD 316.00 311.00
3 CWAD 13.0 302.00 297.00
3 CWAD 11.5 297.00 291.00
3 CWAD 293.00 288.00

Canola
1 Canada 508.00 506.00

 

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
2017-18 pools
PROs for the 2017-18 pools are based on the latest information available. The 2017 harvest progress in Saskatchewan and Alberta is ahead of average at 75 and 56 per cent complete, respectively, versus 58 and 53 per cent, the respective five-year average. Drought conditions during the growing season are the main cause of the earlier than normal harvest in Saskatchewan and Alberta. The story in Manitoba has been slightly different as recent rains have slowed harvest progress. Harvesting of spring cereals in Southwestern Manitoba is nearly complete with yields being higher and protein being lower than expected. In the U.S., planting of hard red winter wheat is under way.

Compared to mid-September, the wheat pool returns are up $15 per tonne due to the rally in the futures and a weaker Canadian dollar. Minneapolis futures have strengthened in anticipation of the USDA Small Grains Report, where the trade expects production to be reduced in drought areas of the U.S. Northern Plains. Durum values are up $5 per tonne as a result of FOB export values holding firm over the past month and weaker Canadian dollar. Contributing to the increase in PRO values for both the wheat and durum pools, as well as the increased canola PRO is the reduction in anticipated execution costs.

General pool assumptions:

  • Canadian dollar at 80.5 cents versus the U.S. dollar.
  • Current forward futures structure for wheat and canola.
September 28, 2017