Canada’s Wheat Export Outlook Dimmed by Prolonged Drought

Canada was anticipated to be the market’s shining star when global wheat supplies started to become constrained as a result of the conflict in Russia and Ukraine and El Nino drying up the Australian crop.

But as S&P Global said, Canada is also dealing with rising temperatures and low soil moisture levels, which has market investors wondering about the quality of its fresh wheat harvest and export possibilities. From a 35.3 million mt full-year prediction given in July, Agriculture and Agri-Food Canada in its August report decreased its forecast for total wheat output in MY (Marketing Year) 2023–24 to 33.2 million mt—2% less year over year. It forecasts a decrease from the 24.6 million mt exported by Canada during the previous season to 23.8 million mt for MY 2023–2024.

Many market participants were kept out of the market due to choppy grain futures markets and questionable yield forecasts. From May on, the majority of the sales were hand-to-mouth. Since market value varied depending on the site of trade, the bid-offer ranges for FOB Vancouver basis prices—the premium over Minneapolis spring wheat futures—were large for several months. Many in the market were satisfied to hold off on actively marketing grain until closer to harvest, when more details about the quality and protein content would be known.

Following the termination of the Black Sea grain deal, the December contract on the Minneapolis grain market rose to an eight-month high of $9.445/bushel in July. Prices in Vancouver were generally stable for the duration of the marketing year and only slightly increased during the peak harvest season in September and October before declining in the months that followed.

But during the rest of the year, intermittent increases in Canadian wheat prices were caused by ongoing tensions in the Black Sea region. However, given that during the course of the year, FOB Vancouver outright prices largely followed the movement of futures, trade activity was largely muted.

According to S&P Global data, the 13.5% FOB Vancouver 30-45 days ahead was priced at $316.18/mt on August 30th, down $62.47/mt from the prior year and $56.86/mt from the initial 2023 estimate.

The regular Japan tender published by the Japanese Ministry of Agriculture, Forestry, and Fisheries, which continuously sought high protein wheat and frequently sourced this from the US and Canada, is one of the international tenders that is being actively observed during this gap in market activity.

Markets have been on edge due to the weather, which has been getting hotter and drier. The pressure on supplies is also being increased by widespread drought in important wheat-producing regions of North America and the EU.

based on the S&P Global Commodity Insight, The US Department of Agriculture estimated worldwide wheat exports for MY 2023–24 (July–June) at 209.4 million mt, down 9 million mt from the prior marketing year, in the most recent World Agricultural Supply and Demand Estimates report published on August 11.

Since Russia’s invasion in February 2022, exports of wheat from Ukraine, a major exporter, have slowed. There have been concerns about future exports from Ukraine since the Black Sea Grain Deal collapsed in July. Compared to 16.8 million mt the year before, the USDA predicted that Ukraine would export 10.5 million mt of wheat in MY 2023–24.

Due to rising temperatures and potential production declines, Australia’s wheat exports are likewise projected to experience a dramatic reduction. The USDA predicts that Australian wheat exports will decrease by 11 million metric tons annually to 21.5 million metric tons in MY 2023–24 (October–September).

Given the unfavorable weather in Canada’s major wheat-producing regions, the harvest will certainly suffer and the country’s ability to close the export gap would be constrained.


Kaderabek-Vale, Ashya., & Nandy, Sampad. 2023. S&P Global; Drought dries up Canada’s prospects for wheat exports. Retrieved from

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