There is rain forecasted through the weekend in Canada, which though welcome, is expected to delay harvest progress.
Meantime, Saskatchewan spring wheat was 13% harvested and 4% were in swath as of Aug. 16th.
Statistics Canada’s crop update is due in one week, with private sources expecting figures well below the USDA’s 24 million mt.
Meantime, Canada exported 792,000 mt of wheat during crop weeks 1 & 2, which is 145,000 mt smaller than what we did last year.
In this context, the milling wheat market continue to stay firm with bids around $10.50/bu.
About durumwheat, around 22% of Canadian durum has been combined and yields continue to disappoint.
Meantime, durum exports for weeks 1 & 2 amounted 230,000 mt, which is 47,000 mt ahead of last year’s export shipments.
In this context, Canadian wheat prices have responded strongly to the combined US-Canada durum problem, and $20/bu is now bid for N 3 CWAD in Saskatchewan.
$20.00/bu for N 3 CWAD is in the market as of last Friday.
These are the highest durum prices and the biggest premiums over spring wheat that we have ever witnessed.
Its should to note that even now, Canadian bids tend to show much bigger grade discounts than US bids.
Indeed, prices by US companies have been leading bids in South Saskatchewan, with Canadian Co’s clearly playing catch-up.
For this week, started August 23, Canadian wheat prices for FOB delivery were (Cdn$/mt):
– for the N1 class CWRS 13.5% – $499,53, down $4.1 per tonne;
– for the N2 class CWRS 13.0% – $492,67, down $3.67/t;
– for the N3 CWRS – $403,72, down $10.27 ;
– for the N1 CWAD – $746,51, up $99,65 per tonne.
(1USD=Cnd$1.265).
Outlook:
Fundamentals for wheat remain very strong, even if the US dollar has broken solidly, backing to the level of November last year and has determinated a sizeable sell-off in corn and soybeans.
That took US wheat futures lower on last Thursday and again on last Friday.
Additionally, USDA expects global wheat exports to be down by 2% to 178.2 million mt from 181.1 million mt in ‘20/21, but other analysts put exports supplies even lower, specifically by the #EU and Canada.
On the other hand, wheat quality is still the major problem across Europe, but especially in France.
Russian harvest data has restarted but still seems to indicate a crop of around 73-75 million mt.
However, the upcoming rise in the export tax is reportedly starting to push farmers into selling their wheat, which is pressuring domestic prices.
About Canadian farmers, seems that they don’t rush to sell right now, other than for durum, which may a good opportunity to provide cash flow, seen high price.
