Wheat is always being planted and harvested somewhere in the world. Canadian spring seeding is wrapping up just as the winter wheat harvest starts in the southern United States. It makes for a dynamic marketing picture.
Russia/Ukraine: The amount of wheat grown in Russia and Ukraine could have an outsized influence on commodities. Frosts, coupled with lack of moisture and a switch to hotter temperatures, seriously cut into production estimates, causing wheat futures in the U.S. and Europe to climb. The combined Russia/Ukraine wheat crop is at risk of coming in below 100 million tonnes for the first time since 2018-19.
India: Official stocks in the country’s government warehouses have fallen to their lowest level in 16 years after poor local production in the past two years saw much of those reserves released to lower prices and boosted domestic supplies. There’s talk now that India could be in the market to buy a few million tonnes of wheat. The notion that India could import wheat for the first time in six years has been enough to boost futures prices. India has a 40 per cent tax on wheat imports, but the market expects that duties will likely be dropped at the end of June.
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Canada: Supply tightness and increased demand elsewhere in the world opens the door for more Canadian exports, depending on the size of this year’s crop. Old crop Canadian wheat exports of 18.04 million tonnes through 43 weeks of the crop year are running about 9.5 per cent ahead of what moved by the same time last year. Record sales are likely if the pace is maintained. Canadian wheat bids have generally strengthened in sympathy with the U.S. futures over the past few months, although old crop bids remain about $30 to $40 per tonne below the year-ago levels heading into the summer months.
