Just before the break the old Canadian Wheat Board, now called G3 adjusted their estimates for the 2016-17 pool on durum wheat. Many markets around the world use this pool estimate as a benchmark pricing mechanism but do we need to ask ourselves since deregulation is the pool to be viewed the same as any other non regulated or statutory pool, is it now simply a grain marketing mechanism put in place to make money for the shareholder.
The Pool Return Outlook for their 1CWAD13 grade, which looks most closely to our own DR1 grade, fell from C$387 / tonne to C$360 (US$268) / tonne, a drop of $C27 / tonne, a drop of almost 7% in one adjustment. The decline in value per tonne was similar across the lower protein CWAD1 as well.
Ocean freight is roughly worth around US$60 /tonne to the Mediterranean so 1CWAD13 is roughly worth US$328 FOB somewhere like Italy. Ocean freight from Australia to the same location would be roughly $32 / tonne. So 1CWAD13 FOB Australia may come in at a number close to US$296. Port cost in Australia vary but using a nominal estimate of say AUD$30 to FOB it the result NTP is around AUD$380 / tonne.
Through out the next couple of days I will continue to try and proof this price assumption and continue to work on the combined package to try and achieve this level.