Brazilian millers bought three cargoes of western Canadian wheat totalling 80,000 tonnes, the Canadian Wheat Board said on Wednesday. The CWB also said further shipments were possible.
"One ship of western Canadian wheat has departed for Brazil, another is being loaded and a third nominated," CWB media relations manager Maureen Fitzhenry told Reuters in a e-mail reply.
"I should add that this may not be the end of the vessel nominations to Brazil," Fitzhenry added. Brazilian traders earlier had reported purchases of Canadian wheat by millers in north-east Brazil who received a discount of $30 per tonne from the Canadian Wheat Board.
"They paid $190 per tonne two weeks ago, when the price was $222 per tonne FOB," Lawrence Pih, president of Moinho Pacifico, said, adding that the first shipment was due to arrive at the end of June. Canadian wheat is now about $230 per tonne. Brazil's wheat is harvested in September, but won't be ready for milling until October.
Pih said supplies would become critical in August, when Brazil will be looking for US or Canadian wheat. Brazil is the world's biggest wheat importer in 2006/07 (October-September), purchasing 7.9 million tonnes. It is suffering from a shortage of supplies from the domestic market and from Argentina, traditionally its main provider.
Brazil's wheat crop was ravaged by frost and drought last year. Output was only 2.2 million tonnes, compared with demand for 10 million tonnes. Some Brazilian traders forecast that Brazil could buy up to 2 million tonnes of wheat in 2007 from non-traditional suppliers.
Canada sold 71,500 tonnes of wheat to Brazil in the year ended July 31, 2006, according to Canadian wheat industry data. In the current 2006/07 marketing year, Canada had not sold any wheat to Brazil through April. In 2004/05 Canada did not export any wheat to Brazil.
Meanwhile, the Canadian Wheat Board will continue to sell barley after it loses its monopoly on August 1 because it is legally obliged to do so, the chairman of its board of directors said on Tuesday. "We have to sell barley in the new crop year," Ken Ritter said in an interview.
The CWB, one of the world's largest grain marketers, had said it was considering bowing out of the barley market because it doesn't own grain handling facilities, and would be unlikely to be able to offer farmers a premium to grain companies who control the space.
On Monday, the Conservative government announced regulations to end the CWB's monopoly on sales of barley to maltsters and export markets beginning August 1.