Canada is expected to export more wheat to the U.S. this year than in 2012-13, Alex Bos of Louis Dreyfus Commodities said during a presentation at the Cereals North America global grain conference in Winnipeg.
“We only have about two months of data for the current marketing year, but we’re already trending higher for wheat exports from Canada into the U.S.,” said Bos.
According to Agriculture and Agri-Food Canada’s supply and demand report from Oct. 16, Canada exported a total of 19.44 million tonnes of wheat in 2012-13. AAFC estimated 20.5 million tonnes would be exported in 2013-14.
Canada may also be able to increase its exports into Southern Hemisphere countries, including Colombia, Peru, Venezuela and others that would normally buy from the U.S., Bos added.
The U.S. spreadsheet looks tight due to increased feed use in the country because of tight corn supplies last year and strong export demand. The U.S. won’t likely be able to take on much more export demand because of this, Bos added, and Canada could step in and absorb some of the extra demand.
Canada may also be able to enter the markets that would traditionally be buyers of U.S. hard red winter wheat because of a recent downturn in spring wheat prices making the Canadian product more attractive, he said.
He added that because of the huge Canadian wheat production seen this year (33.03 million tonnes, according to Statistics Canada), futures prices on the Minneapolis Grain Exchange (MGEX) have lost their premium over Kansas City Board of Trade (KCBT) wheat futures prices. Therefore, some buyers who have traditionally bought through KCBT are now looking at MGEX wheat.
The MGEX December wheat contract settled Wednesday at US$7.1225 per bushel, which compares with the December contract on the KCBT, which closed at US$7.165/bu.
— Terryn Shiells writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.