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Canada's wheat export prospects strong, despite some crop setbacks

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Canada’s wheat harvest will fall short of initial expectations, thanks to dryness setbacks to early-seeded crops, but will remain the second largest on record – while export prospects have improved.

 

The US Department of Agriculture’s Ottawa bureau pegged at 32.65m tonnes Canada’s wheat crop, including durum, this year – a little below the USDA’s official figure of 33.30m tonnes, which was restated in Monday’s Wasde briefing.

 

The bureau flagged a yield estimate of 3.31 tonnes per hectare, below the USDA’s official 3.43 tonnes-per-hectare figure, after dryness which saw “most” wheat-growing going “60-100 days during the growing season with precipitation below 0.5mm.

 

“Yields are expected to be highly variable as farmers who seeded late were reporting good growth in late July, while farmers who planted well before the rains in early spring anticipate lower yields.”

 

Harvest estimates

However, the bureau’s estimate remains above the 32.0m-tonne forecast from Canada’s farm ministry, AAFC, and would still rank as the country’s second largest harvest ever, behind the 37.59m-tonne haul reaped six years ago.

 

Furthermore, the weaker output prospects have not dimmed Canada’s exports prospects, with the bureau in fact, at 24.40m tonnes, foreseeing shipments 400,000 tonnes above the USDA’s official forecast.

 

The bureau’s figure is also above the AAFC’s expectation of 23.60m tonnes.

 

It would also come in only marginally short of the record 24.50m tonnes in shipments that the bureau forecasts for this season, again an outlook more optimistic than from the USDA itself, or AAFC.

 

‘Rocketing share’

“Total wheat export demand appears strong,” the bureau said, highlighting a recovery in the pace of durum shipments to Italy, but also increased trade to China, whose imports from the US have been hurt by trade tensions, and from Australia by drought-reduced production.

 

“Canada’s share of total Chinese imports of wheat has rocketed above 60% in 2018-19, up from 32% in 2017-18, as US wheat exports to China have plunged and Australian exportable supplies have fallen sharply.

 

Furthermore, Canada’s grain exports are being hastened by infrastructure improvements, notably at inland grain terminals to improve loading efficiency, and at ports.

 

Canada’s strong wheat export trade to China contrasts with a slump in rapeseed shipments on this route, blamed on a diplomatic dispute between countries after Canada arrested a Huawei executive at the US’s behest.

 

Harvest progress

The comments come as Canada’s farmers have already reaped a significant of winter wheat, which accounts for a small proportion of the overall wheat harvest, with reaping of spring-seeded crop on the horizon.

 

Data overnight from Saskatchewan, the country’s top grain-growing province, showed that “17% of the fall rye, 14% of the winter wheat, three% of the field peas and 1% of the lentils are now stored in bins.

 

“Despite rain delays in some areas, producers now have over 1% [of overall crops] swathed or ready to straight-cut,” with a small amount of spring wheat in the south east of the country having received this treatment.

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