(Twitter/@SaskWheat)

By Alice McFarlane

Wheat Markets

Wheat exports below expectations

Mar 6, 2020 | 3:39 PM

A market analyst says there will be less wheat leaving the country.

Marlene Boersch with Mercantile Consulting Venture told farmers at SaskWheat meetings this week the exports for the 2019-20 crop year will be lower.

“I tend to think that we will fall short of the 18.5 million metric tonnes (MMT) that Agriculture and Agri-Food Canada is predicting. If you prorate year to date exports to the whole year, we only had about 15.5 MMT. As I said, we are getting towards new crop buying so I find it difficult to see how we can catch up with the delays that we have had already.”

Boersch was spearking about last month’s rail blockades and the CN conductors strike in November. Boersch said she believes wheat sales have been and will be lost as a result.

“Particularly as we’re going towards new crop markets on wheat. The shift happens a bit more quickly than most farmers anticipate because in other origins they harvest earlier and there’s new crop wheat being traded internationally along with old crop wheat. I’m certain we have been very careful to offer wheat when we weren’t sure we can supply,” she said.

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Boersch said world wheat prices are now starting to drift lower with ample global supplies and buyers not being in a rush to make long-term deals. Boersch isn’t convinced China will be buying much U.S. wheat under the trade deal recently signed between the two countries.

Boersch said anticipates a five per cent drop in the number of acres seeded to wheat in Western Canadian this spring.

“The export movement has been slow and prices are not very exciting right now. Given the increased carry out, that should give us about the same supply around 33 million MMT next year,” Boersch said. “It’s different on the durum side. I think we might see a 15 per cent increase in acreage. Durum values have been better than spring wheat and exports are up significantly over the last year. We think we can reach 4.8 MMT for this year.

Boersch said producers will have a lot to consider when seeding the 2020 crop.

“If you are in the better yielding areas, canola still works, lentils, there’s also durum, some disease considerations and so on. It’s probably going to be a year where you have to be very careful in terms of knowing what a return on investment is when you want to pull the trigger on prices. But it’s also not catastrophic by any means yet,” she said.

The uncertainty surrounding COVID-19 will conitnue to impact world grain markets. Boersch said we’ll just have to ride it out.

“I don’t think any of us know how it’s going to affect us, how widespread it will be. There are all kinds of theories about it so it throws in some extra unknowns,” she said. “I think we should just carry on and just be very disciplined with what we do. As you saw in the presentation, I made a couple of question marks behind world demand for wheat, for example, is it going to affect demand and this is going to affect trade? We simply don’t know.”

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alice.mcfarlane@jpbg.ca

On Twitter: @AliceMcF