Western Canada wheat prices hit new low as global inventories build

Western Canadian physical wheat set new record-low outright prices June 17 as persistent demand for old crops limited outlets for new crops and prices in the Black Sea region declined as well.

Platts assessed FOB Vancouver Canada Western Red Spring Wheat at $269.88/mt for 30- to 45-days forward. The previous record low was set April 2 at $275.03/mt, data shows. Platts launched its wheat assessments in November 2021.

Western Canadian wheat prices have fallen eight of the past 10 trading days and about $34/mt in that time. Physical wheat prices have declined by 14% in 2024 so far. The trend has not been seen globally: Australian premium wheat fell 4% this year, while FOB Black Sea Russian wheat dropped 3% and neither market is near its lowest point in terms of value.

Canadian crop conditions are improved and remain favorable overall, according to S&P Global Commodity Insights analysts. In Saskatchewan, recent rainfall slightly delayed plantings, which are now coming to an end. A higher proportion of spring wheat was reported to be behind the normal stages of development due to cooler temperatures as well. In Alberta, seedings are complete, and moisture levels are nearly ideal.

Decreases in the Black Sea region are largely driving Canada's recent falling prices. Platts assessed Russian wheat at $234/mt June 18, a drop of 4% in the past week and a steady fall since June 5. Traders said that halted wheat inflows from Turkey and expectations of India's wheat import duty prevailing were adding to market bearishness, adding to the new crop in Russian and Ukraine set to enter the market in July.

"There are more sellers out of the Russian ports now, as they need to sell," a market source said. "The market was hiding until the ban."

Turkey's agriculture ministry announced the halting of wheat imports from June 6 to mid-October to protect domestic farmers from price fluctuations and create a favorable market for producers. The import halt may be extended beyond Oct. 15 depending on market conditions, it added.

Turkey imported 12 million mt of wheat during the marketing year 2022-23 (June-July), according to US Department of Agriculture data. In India, the Indian government ruled out any proposal to reduce or alter the import duty on wheat on the back of sufficient stocks and a slight rise in production.

India currently levies 40% import duty on wheat.

Platts is part of S&P Global Commodity Insights.