Wheat exports from North America have been quite strong so far this crop year, with both the United States and Canada off to a good start.
The government shutdown in the U.S. has limited the data available in monitoring U.S. wheat sales, but export inspections are still being reported. Canadian export data from the Canadian Grain Commission continues to be released every week.
U.S. wheat exports during the week ending Oct. 16 were solid at 480,614 tonnes. This pushed total exports to date to 11.92 million tonnes that have been shipped since June 1.
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This is the strongest export performance for U.S. wheat since the 2013-14 marketing year.
The challenge for U.S. wheat exports during the coming months will not be due to export demand, but limited export capacity due to near record corn and soybean crops.
Soybean inspections were 1.47 million tonnes and corn shipments were 1.32 million tonnes. Over the next few months, corn and soybean exports will occupy most of the U.S. export capacity to the detriment of wheat export potential.
Canadian wheat exports are currently moving at a record pace with 710,500 tonnes shipped during the week ending Oct. 12. This brought the crop year-to-date total to 4.28 million tonnes and is 532,600 tonnes ahead of last year’s pace. Remember that the Canadian crop year began Aug. 1.
The wheat exports were exported mostly from west coast terminals, which shipped 513,000 tonnes. St Lawrence terminals shipped 167,200 tonnes, while primary elevators loaded 11,400 tonnes for U.S. and/or Mexico destinations.
Deliveries to primary elevators were strong in the week ending Oct. 12 at 474,000 tonnes.
The August export data from the grain commission indicates that demand for Canadian wheat is broad based with exports to Europe leading the way at 228,600 tonnes.
Japan was the destination for 145,500 tonnes of wheat, while Indonesia received 135,600 tonnes.
Exports of wheat to Latin America were modest in August due to strong competition from the U.S. Leading purchasers of U.S. wheat in Latin America in August were Mexico, Colombia, Venezuela and Ecuador. Ecuador was the largest Latin American buyer of Canadian wheat in August.
Wheat futures have been bearish through the first half of the U.S. marketing year despite strong exports from the U.S. and Canada.
The positive news is that basis levels have improved this fall, but this hasn’t been enough to make up for the drop in futures.
With the Southern Hemisphere harvest just getting underway, there appears to be no real catalyst on the horizon for wheat prices to rally significantly.
