Wheat exporters expected to set record pace
The wheat market has been essentially moving lower over the past two years. Its main theme is that wheat demand is poor and needs to pick up to support wheat prices.
Someone should tell the wheat exporters in Canada about the lack of demand. Recent data from the Canadian Grain Commission indicates that exports will hit a new crop year record at the end of July.
They are on a record pace this year. Crop year-to-date exports for week 47 (week ending on June 29) are more than 1.017 million tonnes above last year’s pace, according to data from the commission. Exports during week 47 totalled 477,600 tonnes, which brought total exports to 23.2 million tonnes.
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Exports over the past week were primarily from west coast terminals, which shipped 388,500 tonnes during the past seven days. St Lawrence terminals shipped 74,000 tonnes during the week, while Prairie terminals exported 15,100 tonnes to North American destinations.
Wheat exports are expected to continue at a strong pace through the remainder of the crop year. Primary elevators in week 47 received 472,700 tonnes, which will be shipped in the coming weeks. Terminal elevators on the West Coast had 396,200 tonnes of wheat in-store on June 29. The wheat export program should remain strong into the end of the crop year.
Canada’s primary markets for wheat in the 2024-25 marketing year have been mostly in Asia and Latin America.
Exports to Asia totalled 8.05 million acres through the end of May, while the Western Hemisphere imported 6.82 million acres. Western European and African customers accounted for 1.8 and 1.7 million tonnes, respectively.
Indonesia was the largest importer of Canadian wheat to May 31 at 1.94 million tonnes. Japan and China rounded out the top three importers of Canadian wheat by importing 1.59 and 1.57 million tonnes, respectively. Peru and Colombia are the fourth and fifth largest customers at 1.35 and 1.06 million tonnes, respectively.
Despite the tariff threats, the United States is the sixth largest customer of Canadian wheat at 985,300 tonnes.
One of the strengths of Canadian wheat exports is the diversity of the markets. According to the grain commission data, 63 countries have imported Canadian wheat so far this crop year. Canadian wheat exports are not reliant on any single customer.
The strong export demand has resulted in a small price bounce in cash wheat prices.
Even nearby spring wheat futures are close to 30 cents per bushel higher than last year at this time.
Cash wheat prices range from $5 to $20 per tonne higher with the largest increases seen in the western Prairies.
Although wheat prices are low compared with two and three years ago, at least they appear to have stabilized. The only question is, when do prices begin to rally from the current base?
Bruce Burnett is Glacier FarmMedia’s senior editor for weather and markets.
Source: producer.com