November 8, 2013
Canada''s wheat export to US may further rise in 2013-14
Canada''s wheat export to the US in 2013-14 is expected to be higher than in 2012-13.
This is according to Alex Bos of Louis Dreyfus Commodities 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 US," said Bos.
According to Agriculture and Agri-Food Canada''s (AAFC) supply and demand report from October 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 US, Bos added.
The US spreadsheet looks tight due to increased feed use in the country because of tight corn supplies last year and strong export demand. The US will not likely be able to take on much more export demand because of this, and Canada could step in and absorb some of the extra demand, Bos added.
Due to a recent downturn in spring wheat prices, Canada may also be able to enter the markets that would traditionally be buyers of US hard red winter wheat, 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 (Nov 30) at US$7.1225/bushel, which compares with the December contract on the KCBT, which closed at US$7.165/bushel.