Drought across the Prairies this year has resulted in Canadian spring wheat seeing one of the biggest price increases among the major export countries.
As can be seen from the table shown below, the monthly average price of Canadian Hard Red Spring wheat (FOB Port of Vancouver) was $396/tonne in October, up a whopping $137 or 53% from the same month a year earlier. In comparison, US Hard Red Spring prices (FOB the Pacific Northwest) were up 46% to $427/tonne, while US Hard Red Winter (FOB the Gulf of Mexico) gained 30% to $355.
Soft White (SW) quotes were up dramatically as well, (+76% to $445/tonne) as drought in the Pacific Northwest region resulted in a much smaller crop.
The summer-long drought in the Canadian Prairies reduced 2021 national spring wheat output to an estimated 15.32 million tonnes, down more than 10.5 million or about 41% from a year earlier. US spring wheat production plummeted to just over 9 million tonnes, a drop of more than 43%, with drought particularly impacting the largest US spring wheat production state of North Dakota.
Regardless of the short supplies and increase in prices, global wheat demand is expected to remain strong. In its latest monthly supply-demand update last week, the USDA pegged total worldwide exports for the 2021-22 marketing year at 203.16 million tonnes, up from 199.63 million in October and 202.25 million a year earlier. The same report put the 2021-22 US season average farm price for wheat at US$6.90/bu, compared to $5.05 and $4.58 the previous two years.
Meanwhile, 2021-22 global wheat ending stocks were trimmed another 1.4 million tonnes from October to 275.8 million (versus 287.95 million in 2020-21), with all the monthly decline coming in the major exporting countries, including Argentina, Australia, Ukraine and the EU. The only major exporting country to see an upward revision in wheat ending stocks from October was Russia.
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