Tuesday, July 3, 2007

Rainy conditions to keep wheat prices rising

Most farmers around here were able to get their crops in with no problem. I noticed on my trip to Regina that many crops were doing very well. It seems as if we are to have some hot weather with just scattered showers so the crop should do quite well.
I have a farmer friend who is actually optimistic for a change! However, he does complain that input prices are very high and he is not about to purchase a lot of new equipment banking on the future returns. There seemed to be very heavy plantings of canola in many farms around here and all the way to Regina.

Rainy conditions likely to keep wheat prices climbing
Farmers say prices not rising fast enough, given tight supply worldwide
Last Updated: Monday, July 2, 2007 | 10:33 AM CT
CBC News
The Canadian Wheat Board expects the price of wheat to rise by $18 a tonne this month due to poor weather conditions in wheat-growing countries: too much rain in the United States and Canada, and too little of it in Russia and Ukraine.

The projected increase, which would work out to about 50 cents a bushel, is the highest that the Winnipeg-based wheat board has predicted, month over month, in five years.

"We've seen in the U.S. southern plains just a whole bombardment of rain, which has really been unfortunate for their hard red winter crop, and for both production and quality," wheat board spokeswoman Maureen Fitzhenry told CBC News.

In Canada, "the wheat crop is going to be significantly reduced from previous years because of all the rain that happened in the seeding time, which meant that a lot of central and northern areas couldn't get wheat in the ground and had to switch to barley or oats," she added.

"Then we have in Russia and Ukraine — it's really dry, and that's reduced their production expectations."

But many Canadian wheat farmers expected higher prices due to the short supply worldwide, said David Marit of Fife Lake, Sask.

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"When you look where it's at, it's probably about a 20 per cent increase," said Marit, also president of the Saskatchewan Association of Rural Municipalities. "Well, barley prices have increased almost 80 per cent over a year ago."

Fitzhenry said wheat farmers may not see much of the price increase end up in their wallets, thanks to the strong Canadian dollar.

"The wheat prices would be that much higher if it wasn't for the value of the Canadian dollar continuing to move upward," she said. "The wheat-per-tonne prices would actually be $11 more."

Marit said that dollar is affecting what farmers receive for all crops. He said he hopes the wheat board will sell a lot of this year's crop, so that farmers can move their crops off their farms as quickly as possible and get paid.

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