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Global importer demand continues to fade ahead of the arrival of new crop says Wheat Market Outlook

  • Global importer demand continues to fade ahead of the arrival of new crop. For the old crop demand that remains, the decline in cash prices over the month of April has caused some interested changes to the trade matrix.

  • Spring wheat prices suffered the steepest losses over the month as FOB prices for 13.5 pro HRS in the PNW and Vancouver fell $46/mt and $44/mt respectively. The decline in Canadian spring wheat prices have narrowed the spread between Canadian and Australian wheat which only lost $20/mt over the month.

  • Russian export sales are declining as falling prices in the EU has caused EU wheat values to descend below the $275/mt price floor of Russian wheat.

  • For new crop, U.S. SRW is currently the world’s cheapest wheat on a FOB basis by some $10/mt.

Global wheat production and trade

There is a lot of competition in the wheat markets as wheat is produced around the world. Below is a brief synopsis on last week’s market events in the major wheat origins.


  • July 2023 contract Chicago winter wheat closed at $633-6, up 4-4 cents on Friday, down 39-2 cents on the week.

  • July 2023 contract Kansas hard red winter wheat closed at $776-2, up 11-0 cents on Friday, down 49-2 cents on the week.

  • July 2023 Minneapolis hard red spring wheat closed at $803-6, up 18-6 cents on Friday, down 42-0 cents on the week.

  • U.S. wheat futures are currently trading 15 to 20 cents lower at the time of writing.

Canadian Wheat:

  • The big news item in last week’s market was the Statistics Canada (StatsCan) projected acreage report. The report was disappointingly based on a Dec. 15 - Jan. 14 survey, instead of the traditional March grower survey. We are concerned that the timing of the survey impacted the quality and reliability of the projections.

  • StatsCan put Canadian total wheat area at 27.0 million acres. This would be a six per cent increase from last year and the largest all wheat area since 2001. Spring wheat area was put at 19.4 million acres, up eight per cent from last year. Winter wheat area was up at 1.5 million acres which is 13 per cent more than last year.

  • StatsCan’s seeded area number for spring wheat is close to our estimate, but we are skeptical that winter wheat area will be up by 13 per cent. If realized, higher seeded area and a return to trend yields would increase non-durum wheat production in Canada by six per cent (~1.5 million mt) to just under 30 million mt.

  • A 30 million mt crop would cause total supply in Canada to rise to 33.8 million mt. This is five per cent more volume than last year, and the largest level since the 2020/2021 season. Agriculture and Agri-Food Canada (AAFC) is currently thinking that exports next year will be unchanged at 19.6 million mt, and domestic use will be three per cent higher at 8.1 million mt. If true, ending stocks would grow by over 40 per cent to a large 5.7 million mt.

  • Exports in week 38 were large at 499.1k mt. This makes for a season total of 14.7 million mt which is 76 per cent more than last year. Canada needs to export an average of ~340k mt of wheat per week for the remainder of the marketing year to meet the AAFC’s 19.6 million mt export number.

  • We have heard of some seeding progress in Alberta, and some fieldwork will likely begin in localized areas of Manitoba and Saskatchewan this week. It seems like seeding will only begin in earnest in the second week of May.

  • Durum: StatsCan is expecting that seeded area in Canada will increase by one per cent from last year to 6.1 million acres. This is largely in line with our expectations. STC thinks that a five per cent decline in seeded area in Alberta will be offset by a three per cent increase in seeded area in Saskatchewan. Trend yields would result in durum production in Canada to increase by seven per cent from last year to 5.8 million mt.

  • A 5.8 million mt crop would cause durum supply in 2023/2024 to be five per cent higher year-over-year at 6.3 million mt. This is not burdensome but would require exports to be higher than the AAFC’s current 4.4 million mt projection which reflects an eight per cent decrease in exports from the current year.

  • Durum exports in week 38 were 185.1k mt for a season total of 4.0 million mt. The AAFC did not raise their 2022/2023 export projection for durum in their recent update, which we think was a miss. To meet the AAFC’s 4.8 million mt export number, Canada only needs to ship 800k mt of durum in the remaining 14 weeks of the marketing year. Almost 500k mt of this has already been delivered into the Canadian elevator system.

  • Mercantile is sold out of old crop durum and have sold 40 per cent of expected new crop production.



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