Market Insider

Harvest Stalled, But Not Exports?

In town for meetings on the 1st and 2nd of October, I left Calgary this week amidst a snow storm – one that put a further damper on Harvest 2018 prospects.

As of last Friday, Alberta Agriculture says that 35% of the spring wheat crop had been harvested. Given the conditions, it’s very unlikely we’ll see much more progress from there. Comparably, through the first week of October 2017, only 25% of the spring wheat crop remained.

Next door in Saskatchewan, as of last week there was 47% of the spring wheat harvest left to go. Again, compared to the first week of October 2017, 92% of the spring wheat harvest in Saskatchewan was in the bin.

Ultimately, headed into this week, there was 10.4 million metric tonnes (MMT) of the Canadian spring wheat harvest still left to go (as per Statistics Canada’s September production estimate). Conversely, Canadian wheat exports (not including durum) for Week 8 were sitting at 322,100 MT. This puts total wheat exports (again, not including durum) are now sitting at 2.86 MMT, nearly 18% higher than this time a year ago.

One of the stories that continues to slide under the radar on the export front is Peru’s concerns about the quality of Canadian wheat. The country purchased more than 1 MMT of wheat in 2017/18. Peru is Canada’s sixth-largest customer.

But Peru has now reached out to the World Trade Organization to complain about weed seeds being in the shipments, most notably ragweed. Given some of the likely quality issues of the 2018 Canadian spring wheat harvest, it might be some time before we see this issue go away.

Thinking about durum, nearly 1.2 MMT of expected production is still in Saskatchewan and Alberta fields coming into this week. Currently, Agriculture Canada is forecasting total Canadian durum exports and food use at 5 MMT. If we take the amount of durum already combined (4.51 MMT), and the carry-in from the 2017/18 crop year (1.4 MT), we probably will meet that need in the short-term. But given the 1.2 MMT still left out in the field, millers and exporters will have to look a little harder for the quality they’re looking for.

Comparably, total Canadian durum exports through the third week of September are sitting at just 466,400 MT, down 21% year-over-year. Keep in mind that, at this point a year ago, Canadian exports were still filling boats for Italy. That stopped in October.

Conversely, so far in the 2018/19 crop year, the US has exported nearly 144,000 MT of durum wheat. This is up nearly 12% year-over-year.

Overall, quality will continue to be a major question mark for the 2018/19 Canadian wheat crop. Thus, we continue to stress the importance to get your grain tested! Don’t be afraid to be an advocate for this to others either: After knowing your cost of production, knowing your grain’s quality is the second-most important thing in my grain marketing plan.

To growth,

Brennan Turner

President & CEO |