Prairie Post (East Edition)

Looking at Canadian crops' winter sales, shipping

- By Brennan Turner, Combyne Ag

Grain markets finished the first week of November mostly in the green on the back of some funding buying and short-covering at the end of the week, amidst other geopolitic­al and production issues.

Following last weekend’s news that Russia was pulling out of the Grain Deal with Ukraine, which allowed food exports to pass safely through the Black Sea, wheat futures jumped 6%. However, thanks to some remedial talks, Russia agreed to come back into the table, and while wheat gave back much of this early-week rally, it still ended the week with some decent gains. U.S. winter wheat futures were also underpinne­d by the USDA’s crop progress report printed a record-low condition for the first week of quality ratings for winter wheat, with just 28% rated good-to-excellent.

There are similar winter wheat concerns in Europe as a warm October accelerate­d crop developmen­t and may leave more fields than usual susceptibl­e to winterkill.

Staying in the Black Sea, Ukraine has exported 14.3 MMT of grain so far in their 2022/23 crop year, a 31% decline compared to the 20.6 MMT sailed through this time a year ago. This current place will likely be offset by a smaller crop, a trend that’s likely to continue into the 2023/24 crop year. As it stands today, it’s estimated that Ukrainian farmers will have planted 30% – 40% less winter wheat than a year ago, suggesting that we won’t be able to count on the eastern European nation next year to help increase already-tight inventorie­s amongst the world’s major wheat exporters.

Coming back home, we’re officially one-quarter of the way through the Canadian 2022/23 crop year, and while export volumes are starting to pick up, heavy rains on the West Coast have slowed port activities a bit. Crop year to date, China has been the largest market for Canadian wheat, doubling what they imported through the same time a year ago, and accounting for about 20% of total wheat exports so far this year. Other major markets for Canadian wheat include the likes of Japan, Bangladesh, and the United States.

Overall, with 4.63 MMT of non-durum Canadian wheat shipped out so far, that’s up 41% versus last year, and 9% better than the 3-year average (which includes last year’s drought-limited volumes). To hit the 18.3 MMT in total non-durum wheat exports that Agricultur­e Canada is forecastin­g, we’ll need to ship out about 350,600 MT per week over the rest of the season (we’re currently average 356,000 MT). Comparably, Canadian durum exports volumes through 13 weeks total just under 825,000 MT, with an average weekly load of less than 65,000 MT. To meet AAFC’s full crop-year target of 5 MMT, we’ll have to see a weekly average of 107,000 MT shipped out for the rest of the year. Grain markets will be influenced by this Wednesday’s November WASDE report from the USDA.

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