Canadian wheat farmers optimistic for 2025 crop; rain plentiful

Canadian wheat growers are approaching the 2025-26 growing season with renewed optimism, with significantly improved rainfall and higher planting intentions pointing to a stronger production outlook. Market participants, however, caution that timely rains in May will be critical to the crop's outlook.

According to the most recent Canadian Drought Monitor update, as of March 31, only 32% of the Prairies region was classified as "Abnormally Dry" or "Moderate" to "Severe Drought"-- a sharp contrast to 95% from the same time in 2024. Improved rainfall and soil moisture have brought relief to wheat growers, particularly in Alberta and southern Saskatchewan, where last season's crop struggled under extreme dryness.

"Drought is not a big concern at the moment," Gunter Jochum, president of Canada's Wheat Growers Association and a Manitoba wheat farmer, told Platts May 2. "I think there's good moisture for putting spring wheat crop in the ground. Maybe a touch on the wet side in some areas, but it's still early as well. Overall, farmers are fairly optimistic."

Prices soften on improved outlook

Encouraged by better soil conditions and firm global demand, Canadian farmers intend to seed 27.5 million acres of wheat for the 2025-26 season, up 2.6% from in 2024, Statistics Canada said in its April Outlook for Principal Field Crops report. Alberta, which saw the most severe drought conditions in 2024, is expected to see the greatest improvement, with a 6.6% boost in acreage to 8.4 million acres. Saskatchewan and Manitoba are expected to maintain steady planting levels at 14.2 million acres and 3.3 million acres, respectively.

A greater production outlook has helped ease preseason Canadian wheat prices compared to 2024. Platts-assessed Canadian West Red Spring wheat 13.5% FOB Vancouver 30-45 days forward prices January-April averaged $268.45/mt, down from $293.33/mt in the year-ago period, when drought concerns, logistical challenges, and geopolitical tensions, largely the Russia-Ukraine war, supported prices.

According to S&P Global Commodity Insights analysts, the promising crop outlook will likely not result in much upside in prices in the near term.

Platts, part of Commodity Insights, assessed CWRS wheat 13.5% FOB Vancouver 30-45 days forward at $274.48/mt on May 2.

Seeding progresses, weather remains critical

Seeding is underway across much of the Prairies, with farmers in recent weeks stepping back from the market to focus on fieldwork. Many growers continue to hold some old-crop inventory as blending insurance after facing lower crop yields in previous years, leading to subdued market activity.

"Fundamentally, the market is neutral," an international CWRS trader said. "Farmers just aren't selling."

Another market participant agreed: "May rains will be super important to get things going again."

Current forecasts by Environment and Climate Change Canada have May-July precipitation levels for key CWRS wheat-growing regions at "Below Normal" levels. While more rain would support crop development, Commodity Insights analysts note the warmer temperatures could help improve soil conditions for seed germination.

Watching the weather closely will be especially important for CWRS wheat, as the crop's high protein and quality rely on a delicate balance of warmth and moisture throughout the growing season.

"Farmers are always optimistic, but ultimately it's in Mother Nature's control," said a Canada-based trader.

Weekly exports for CWRS wheat remain solid, according to Statistics Canada, with 554,300 mt shipped in the week ending April 27, up 8.5% on the week.

Although improved drought conditions and firm demand set a promising stage for the upcoming season, the outlook still depends on upcoming weather conditions.

"I think it's too early to comment on quality and yields," cautioned the market participant. "So far, so good though."