Canadian wheat exports strong as new record remains possible
North American wheat exports stay strong, with Canada hitting a record 11.25 MMT and US shipments at their fastest pace since 2016–17. Despite robust demand, heavy fund short positions and rising competition from Australia and Argentina keep wheat prices under pressure, with futures and cash values well below last year.
Canadian wheat exports remained strong during the week ending Jan. 25 as 353,300 tonnes were shipped during the period.
This pushed total wheat exports to record 11.25 million tonnes for the crop year to date.
Wheat exports are up by 1.19 million tonnes from last year’s record pace.
Exports were primarily from Vancouver terminals, which shipped 319,200 tonnes.
St. Lawrence ports shipped 32,600 tonnes, while primary elevators shipped 1,200 tonnes to the United States and/or Mexico.
Deliveries were relatively strong at 362,700 tonnes although down from the previous week.
The prospects for stronger canola shipments in the coming months will put a crimp in the pace of wheat exports for the remainder of the crop year. That still should not keep wheat exports from hitting a new record this crop year.
U.S. wheat exports were also strong in the week ending Jan. 22, with a total of 378,759 tonnes shipped. This brought total wheat exports to 16.1 million tonnes, which is the fastest pace since the 2016-17 crop year.
Remember that the U.S. crop year begins in June, while the Canadian crop year begins in August.
When you look at exports, it appears that U.S. sales are gaining momentum.
Net wheat sales during the week ending Jan. 22 were strong at 558,201 tonnes. This pushed the total outstanding sales to 5.3 million tonnes and pushed total commitments for 21.45 million tonnes.
It is the fastest pace for wheat commitments since 2020-21, when they stood at 22.4 million tonnes.
North American wheat exports remain strong despite increased competition from Australia and Argentina. The competition has had an impact on wheat prices, with futures trading mostly sideways but remaining just above recent contract lows.
Managed money funds are maintaining a net short position in all three futures markets.
The fund net wheat short stood at 127,069 contracts on Jan. 27. This amounts to a short position of 17.3 million tonnes.
The fund spring wheat short position remains disproportionately large at 21,997 contracts (three million tonnes) net short. That is one of the reasons why wheat futures remain 30 to 80 cents per bushel below the values last year at this time.
Cash wheat prices on the Prairies are even worse, with values down by close to a $1 per bu.
As the saying goes, low prices cure low prices. The problem is that funds appear to believe that more low price cure is needed in the wheat markets.
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Source : The Western Producer
