May 8, 2013

 

Canada's wheat plantings to hit record high since 2000

Canadian growers are expected to plant their biggest wheat crop in more than a decade and Australian wheat growers can expect some tough competition from Canadian counterparts during the next year.

 

This is according to forecasts by Statistics Canada.

 

The Canadian Government forecaster has tipped its growers will plant 10.8 million hectares of wheat - including durum wheat - this season. That is the biggest area sown to wheat since 10.95 million hectares was planted in 2000-01.

 

That year, Canada harvested a 20.6 million tonnes crop, according to Statistics Canada. Canadian wheat plantings are about 1.2 million hectares more than what was sown for last year's crop.

 

It has largely come at the expense of rapeseed, where the area expected to be sown has fallen by a million hectares to 7.7 million hectares and a 200,000-hectare decrease in lentil plantings to 834,000 hectares.

 

Cargill Australia's head of trading and risk management, Josh Martin, said the shift away from rapeseed into wheat in Canada was a function of price and agronomics. Martin said there would be a similar trend in Australia, as lack of rain, along with rotations and prices, weighed on Australian growers' minds.

 

"Globally, there will be a significant impact on Australia prices. Cash prices for wheat might retract about AUD30-40 (US$31-41) a tonne," he said.

 

Martin said Australian growers also faced stiff competition from Black Sea countries. "Black Sea wheat is priced at AUD20-40 (US$20-41) a tonne. So we are seeing significant pressure from the Black Sea and significant pressure from Canada," he said.

 

Martin said it was too early to predict the impact of US production. "On wheat, corn and soy, there are pockets of the US that are OK and pockets showing red flags," he said.

 

"We are in the mix of the US weather market, so there will be some price volatility. It is largely too early to give any assessment (of the impact of the US crop). But there are definitely some concerns throughout parts of the US," he added.

 

Martin said rapeseed prices should remain relatively stable. He said a combination of smaller crops in Australia and Canada, plus rising demand from China, should see rapeseed prices remain similar to current levels.

 

Cargill was expecting Australian rapeseed plantings to fall by about 15% this year from last year's near record crop.