Canada's common wheat exports fall 45% in week ended May 29, prices fall

Canada's common wheat exports fell 45.3% week on week to 168,900 mt in the week to May 29, compared with 308,500 mt in the previous week, data released June 6 by the Canadian Grain Commission showed.

Common wheat exports for the marketing year 2021-22 (August-July) through May 29 stood at 9.5 million mt, down nearly 43% on the year.

Canada's durum wheat exports in the week ended May 29 stood at 30,800 mt, down 74.1% from 118,700 mt in the previous week, the data showed.

Durum wheat exports over Aug. 1, 2021-May 29, 2022 totaled 2.1 million mt, down 60% on the year.

In MY 2020-21, Canada exported a total 26.4 million mt of wheat, however, exports have remained weak to date in MY 2021-22 due to poor output and a lack of exportable surplus.

In its May update, Agriculture and Agri-Food Canada estimated the country's MY 2021-22 wheat exports at 15.3 million mt. For MY 2022-23, the agency expects Canada's wheat output to rise to 21.9 million mt.

Canada's wheat output in MY 2021-22 was seen to be its lowest in more than14 years due to a warm and dry summer.

In MY 2021-22, Canada is likely to harvest 21.7 million mt of wheat, down sharply from 35.2 million mt the year before, the AAFC said. For MY 2022-23, Canada's wheat output is expected to rebound to 31.6 million mt.

Prices fall as demand weakens

The export prices of Canadian wheat fell during the week ended June 3, due to decline in demand for the current crop and a drop in futures prices on Minneapolis Grains Exchange, traders said.

The MGEX July spring wheat futures contract tested as high as $12.1375/bushel on June 3, but was unable to hold gains and settled 7.75 cents/bu lower at $11.9175/bu on June 3. During the shortened trade week the July contract sold $1.13/bu lower than the close from the previous week.

Weaker futures prices during the first half of the week resulted in higher basis prices for the FOB Vancouver export market, but lower cash values did not bring out fresh sales activity. Bid-offer spreads in the basis market widened over the week on uncertainty over plantings and the potential for a return of wheat exports from Ukraine.

Platts assessed 13.5% Canadian Western Red Spring wheat, FOB Vancouver, for 30-45 days forward was assessed at $465.09/mt June 3, down $2.84/mt while 13.5% CWRS wheat, FOB Vancouver for 45-60 days forward was assessed at $467.66/mt on June 3, down $2.85 on the day, according to data from S&P Global Commodity Insights.

Most market participants are now focusing on wheat plantations and harvest as major importers are putting in orders for the new crop expected in August-September, traders said.