Canadian agriculture and agri-food ministry AAFC has kept its wheat production estimate for the 2023-24 marketing year unchanged for a second consecutive month, but any assurance regarding exportable supply is unlikely to stabilise the market.
Soft milling wheat production is still forecast at 25.8mn t, some 2.8mn t lower than in 2022-23, reflecting dry conditions in the key growing provinces of Alberta, Manitoba and Saskatchewan.
AAFC also kept export estimates for the 2023-24 marketing year at 18mn t — 13pc down on 2022-23. That said, exports should be just 2pc below the previous five-year average, AAFC said.
Average protein content for CWRS No 1 and No 2 is projected at 13.8pc — 1 percentage point above the previous five-year average. With other major exporters facing possible protein shortages this marketing year, firm supply of high-protein wheat could allow Canada to boost its market share.
Global high-protein demand is likely to be a more significant driver than production outlooks, with Canadian fob prices historically resistant to changes in production forecasts. The 2023-24 Argus-assessed spot price of 13.5pc CWRS No 2, for example, remained well below equivalent 2022-23 levels, despite production forecasts being revised down sharply in October (see chart).
AAFC has also stuck to its 2023-24 production and export estimates for durum wheat and canola. Durum output is pegged at 4.1mn t and exports at 3.3mn t, while canola output stands at 14.4mn t and exports at 7.7mn t.
