The recent crop assessments on spring wheat across the world, could yield a 21% reduction (-16 Million mt) in the ’21/22 spring wheat production estimate compared to last year.
Despite that, there is a lot of competition in the wheat markets as wheat is produced around the world.
For now, attention is particulary on US and Canada spring wheat production.
About this, last week, Saskatchewan Agency dropped the Good to Excellent ratings for spring wheat by another 9 points on July 29th to 16% Gd./Exc., while increasing the Poor/ V. Poor rating by a big 17 points to 44%.
Alberta Agency also reduced crop ratings (-17 points) to 22% Gd. /Exc.
A 20% reduction from the 5-year average yield for Canadian spring wheat would drop yields to 34 bu/acre, while a 30% reduction would bring yields down to 29.8 bu/acre.
Canadian durum wheat ratings by Saskatchewan Agency dropped by 1 point to 11% Gd/Exc., with 44% rated Poor/ V. Poor.
Alberta Agency also lowered durum ratings by 12 points to 21.5% Gd/ Exc.
Consequentially analysts expects durum wheat yields to be down significantly and are currently penciling in a 25% yield reduction.
North Dakota durum, as we know, is rated to 33% gd/Exc. and 37% Poor/ V. Poor.
However, we must note that these are only rough estimates, and not final numbers.
Meantime, Canadian wheat exports for week 51 were 279k mt for a season total of 19.4 Million mt.
This is 10% (1.8 Million mt) more than last year year-to-date.
Durum exports for week 51 were small at 60 mt, for a year-to-date total of 6 Million mt, compared to 5.2 Million mt last year-to-date.
This is 16% ahead of last year’s pace.
Maybe demand rationing will be necessary as the potential sizes of the Canadian and US crops get smaller and smaller.
About prices Ceres was paying $15/bu for the 3thd class CWAD last week, which is a strong value reflecting the anticipated shortage of durum in the US.
This week, starting August 03, Canadian wheat prices FOB were (Cdn$/mt):
– for the 1thd class CWRS 13.5% – $474,29;
– for the 2thd class CWRS 13.0% – $468,07;
– for the 3thd CWRS – $388,21;
– for the 1thd CWAD – $646,25.
(1USD=Cnd$1.254).
