Farmscape for October 6, 2008   (Episode 2980)

The Canadian Wheat Board reports problems in global financial markets combined with strong worldwide grain production continue to pressure commodity markets.

The Canadian Wheat Board's September Pool Return Outlook for the 2008-09 crop year shows a 27 to 31 dollar per tonne decline in projected wheat values, a drop of five to 31 dollars for durum and a 23 dollar drop for feed barley from August and a 13 dollar per tonne drop in designated barley from mid-September.

Weather and market analysis director Bruce Burnett says the problems in the financial markets have spilled over into the commodities so we've seen commodity prices dip considerably over the past two weeks.

Clip-Bruce Burnett-Canadian Wheat Board  
There have been a couple of factors here on the fundamental side in the world grain markets.

Certainly wheat production continues to be at record levels in a number of parts of the world.

And, despite the fact that we're looking at some diminished crop potential in parts of the southern hemisphere, Australia and Argentina, it looks like the world wheat crop this year is pretty large and certainly on the lower quality end of the wheat side.

Places like the Black Sea and Europe certainly have pressured those markets down considerably.

Add to that some of the credit problems and issues that are emanating from the United States.

It creates pressures on the markets because people are starting to liquidate assets to get into a cash only mode so that really also that puts some pressures on both the commodities futures markets as well as the cash prices.

Burnett says hopefully we'll see some stability in the markets as the U.S. Congress looks at the credit package for Wall Street.

However, he observes, it certainly has been a rough ride over the past couple of months.

For Farmscape.Ca...I'm Bruce Cochrane.

       *Farmscape is a presentation of Sask Pork and Manitoba Pork Council