Highlights

Situation report–February 2007

• Cold prairie weather, rock slides and poor west coast weather resulted in rail shipping delays this winter. Deliveries of rail cars from the Prairies slowed and the Canadian Wheat Board reported that it was two to three weeks behind on its shipping schedule.
• Agricore United and James Richardson International Limited are merging to create Richardson Agricore Limited. The merger is still subject to shareholder approval.
• At December 31,2006, stocks of most grains were down over a year-earlier. Total canola stocks were down to 6.7 million tonnes from 7.5 in December 2005 but were still well above the five-year average.
• Feed grain stocks at December 31, 2006 declined significantly over the previous December. Total barley stocks were the lowest since December 2002 because of a big drop in 2006 production and despite reduced exports.
• In Winnipeg, canola prices rose early in the month on a lower-than-expected December 31 stock number from Statistics Canada, new export business from Pakistan, a firm Chicago soybean complex and a weak Canadian dollar. However, prices were pressured later in the month by a lessening of export demand, the result of exporters not offering grain due to the logistics problems. Cash prices weakened and farmer deliveries slackened.
• On February 27^th, the Chinese stock market fell 9%. This resulted in a general sell off with sharp declines for US corn, soybeans and wheat. By contrast, Canadian canola futures’ prices posted modest increases on the resumption of rail movement.