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Winnipeg Commodity Exchange Feed Wheat Volume Levels Setting New Trends

Date 10/09/2001

Total feed wheat volume levels have increased roughly 34.7% over the same time last month and by 49.4% over year ago levels. Market participants say that the increases in total volume levels for feed wheat is mainly due to uncertainty about the quality of this year's wheat crop in Canada. Ultimately, the quality will determine the size of the Canadian feed wheat crop. Drought conditions throughout the prairies this summer is expected to affect crop yields, however, trade sources noted that drought does not necessarily mean that the quality of the crop will be negatively affected.

Statistics Canada released its latest crop production estimate report on August 28, 2001, stating that production of total wheat will plummet to the lowest level since the last major drought in 1988. Severely dry weather conditions in many growing regions of Canada during July and the beginning of August lowered yields significantly. However, the quality of this year's wheat crop will not be determined until harvest. Statistics Canada's latest crop production estimated total wheat production to reach 21.5 million tonnes, the lowest level since the 15.9 million tonnes produced in the drought year of 1988. The recent five-year average production is 26.4 million tonnes. Statistics Canada will release its next crop production estimate report on October 5, 2001.

Trade sources indicate that significant changes in the price of feed substitutes have played a role in movements in the feed wheat market over the past few months due to dry conditions in Western Canada.

The revised feed wheat contract was introduced on February 14, 2001, which became effective with the Oct 01 contract. The changes included moving the pricing point from an in-store Thunder Bay location to a F.O.B. value at Par region locations, with the Par region being an area in central Saskatchewan. Please refer to WCE website or contact WCE for additional information regarding the revised WCE feed wheat contract.