Canada farmers tiptoe into wheat market, sell canola briskly

Fri Nov 16, 2012 11:27am EST
 
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* Farmers have sold only 20-35 pct 2012/13 wheat-CWB

* Crushers, exporters buying canola, but dropoff seen

By Rod Nickel

WINNIPEG, Manitoba, Nov 16 (Reuters) - Canadian farmers are keeping their bins of newly harvested wheat locked as they cautiously ponder their first sales outside a marketing monopoly since World War 2, while strong demand has pried much of this year's disappointing canola crop off farms.

Farmers have only sold an estimated 20 to 35 percent of the 2012/13 harvest of 26.7 million tonnes for autumn or later delivery, said Gord Flaten, vice-president of grain procurement for CWB, the former monopoly marketer known as the Canadian Wheat Board.

"I think there's a bit of uncertainty, and I think there is a bullish market view as well, which is a big factor," Flaten said. "If you believe prices are going to go higher, you're going to hold off on committing."

A Canadian grain handling source estimated farmer wheat commitments between 30 and 40 percent of the total crop.

For the first time in seven decades, Western Canadian farmers can sell their wheat and barley for export or human consumption to any buyer, not just through the Wheat Board.

Meanwhile, Minneapolis spring wheat futures are trading nearly one quarter above their springtime levels, helped by weather-related problems affecting crops in the Black Sea region and U.S. winter wheat growing areas.   Continued...