Canada's common wheat exports rise 34% on week, FOB prices see sharp gain

Canadian common wheat exports rose nearly 34% on the week to 281,600 mt in the week ended Feb. 27, Canadian Grain Commission data released March 6 showed.

Common wheat exports for the marketing year 2021-22 (August-July) through Feb. 27, however, remained sharply lower on the year. From Aug. 1, 2021, through Feb. 27, 2022, Canada shipped 6.9 million mt of common wheat, down 39.6% from the same period in MY 2020-21.

The rise in exports of the food grain during the week to Feb. 27 was due to an increase in the demand for the Canadian crop as Russia invaded Ukraine and the shipments from Black Sea came to a near-halt, traders said.

Canada's durum wheat exports during the week to Feb. 27, rose sharply to 34,300 mt from 5,400 mt in the previous week, the data showed.

Durum wheat exports over Aug. 1-Feb. 27 totaled 1.5 million mt, down 57.3% from the same period of MY 2020-21.

In MY 2020-21, Canada had exported a total of 26.4 million mt of wheat. During MY 2021-22, however, exports are likely to remain poor due to a lack of exportable surplus.

Agriculture and Agri-Food Canada reduced the country's wheat exports estimates by 1 million mt to 15.4 million mt in MY 2021-22 in its February update.

Canada's wheat output in MY 2021-22 was seen to be the lowest in more than 14 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.

Export prices rise sharply

The export prices of Canadian wheat gained sharply in the week to March 4 as demand for the Canadian crop increased, traders said.

Backlogs at port due to logistical concerns were also seen pushing up prices higher, traders said.

Platts assessed 13.5% Canadian Western Red Spring wheat, FOB Vancouver, for 30-45 days forward at $465.91/mt March 4, and the FOB Vancouver assessment for 13.5% CWRS wheat for 45-60 days forward at $468.85/mt, both up $10.56/mt day on day, according to S&P Global Commodity Insights.

Canada's average wheat prices have gained nearly 17% higher on the month.

The ongoing war between Russia and Ukraine is also likely to provide some support to Canadian wheat export prices, traders added.

Russia and Ukraine's combined wheat exports during the 2021-22 marketing year are estimated to account for 23% of the global trade, according to the US Department of Agriculture.

Some traders expect exports of wheat to remain low in the coming weeks as railways were struggling to deliver to the ports.