Canada Sees Record Low Wheat Stocks Amid Price Drop

Canada has commenced the 2023-24 crop year with historically low combined wheat and durum stocks, with Agriculture Canada estimating only 3.24 million tonnes as of Aug. 1, 2023. This breaks the prior record set in 2021-22 with 3.66 million tonnes following a severe drought.

Despite these dwindling stocks, and even with the U.S. Department of Agriculture projecting a decline in U.S. spring wheat yield and production, Minneapolis wheat prices saw a substantial 15% decline from July 24 to Aug. 24, 2023.

Erica Olson from the North Dakota Wheat Commission believes this price drop is influenced by Russia’s aggressive wheat export program. Russia recorded a high export of 46 million tonnes of wheat in the 2022-23 period, and predictions for the 2023-24 crop continue to grow. SovEcon has increased its forecast for this year to 92.1 million tonnes, exceeding the USDA’s estimation of 85 million tonnes.

Aside from international influences, sluggish U.S. wheat exports and speculators awaiting clearer information about this year’s crop size also impact the market. Brennan Turner, a grain industry analyst, suggests farmers should prioritize fulfilling existing contracts and strategically sell in the fall and winter months.