Canada's common wheat exports slump 44% week ended May 15, FOB prices fall sharply

Canada's common wheat exports fell 44% week on week to 186,600 mt in the week to May 15, against 334,600 mt in the previous week, data released May 23 by the Canadian Grain Commission showed.

Common wheat exports for the marketing year 2021-22 (August-July) through May 15, however, remained sharply lower on the year. From Aug. 1, 2021, through May 15, 2022, Canada shipped 9 million mt of common wheat, nearly 44% lower from a year earlier.

Canada's durum wheat exports in the week ended May 1 rose 10% to 47,300 mt, from 43,200 mt the previous week, the data showed.

Durum wheat exports over Aug. 1, 2021-May 15, 2022, totaled 2 million mt, falling nearly 61% on the year.

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

In its April update, Agriculture and Agri-Food Canada estimated the country's MY 2021-22 wheat exports at 15.5 million mt. For MY 2022-23, the agency expects Canada's wheat output to rise to 21.6 million mt.

Canada's wheat output in MY 2021-22 was seen to be its 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. For MY 2022-23, Canada's wheat output is expected to rebound to 31.2 million mt.

Export prices decline sharply

Export prices of Canadian wheat fell sharply after rising during the week ended May 20, traders said. However, prices remained nearly 5% higher on the month.

Prices rose sharply in the aftermath of India's ban on wheat exports, traders said.

Average wheat prices have gained across the world over the past week as the recent restrictions on wheat exports from India is likely to tighten global supplies at least in the next few weeks, traders said.

India, which emerged as a major supplier of wheat in the aftermath of Russia's invasion of Ukraine, imposed restrictions on exports on May 13.

However, demand for Canada's wheat has been hit by sharply higher export prices, a Vancouver-based trader said. Lack of exportable surplus and weather concerns in Canada are also limiting shipments, he added.

According to S&P Global Commodity Insights data, 13.5% Canadian Western Red Spring wheat, FOB Vancouver, for 30-45 days forward was assessed at $491.63/mt May 20, down $20.77 on the day, while 13.5% CWRS wheat, FOB Vancouver, for 45-60 days forward was assessed at $492.37/mt, down $21.86 on the day.

On the production side, concerns over continuing drought conditions and higher input costs due to rising fertilizer prices are also in focus, traders said.

However, Statistics Canada has pegged Canada's wheat area in MY 2022-23 at 25.03 million acres, up 7% on the year.