To end the month, spring wheat prices pushed higher on speculation that Russia will cap exports due to ongoing production challenges. Prices also found support after Statistics Canada revealed that spring wheat production is set to decline across Canada compared to last year’s output.
However, it was not enough to recover from a relatively bearish August as front-month spring wheat prices were 3.9% lower than where July ended. They’re also a bit below the 5-year average.
For our GrainCents readers, we’re watching a variety of factors that might affect spring wheat prices: 2 are bearish, 4 are bullish, and 5 are noise.
(If you’re not familiar with what “noise” is, then we recommend you check out our GrainCents risk management process towards spring wheat prices.)
This month, for GrainCents readers, we delved deeper into topics such as:
- The heavy global spring wheat ending stocks seen in the August WASDE report;
- What to make of the influx of high-protein spring wheat, and
- StatsCan’s recent report on Canadian spring wheat production.
Late last week, Saskatchewan Agriculture provided their first estimate of the province’s yield, calling for 40 bushels per acre of spring wheat. This is 14% below last year’s Saskatchewan yield for spring wheat of 46.4 bushels per acre. The 5-year average yield for spring wheat in Saskatchewan is 44.1 bushels per acre, meaning this year’s crop is below the average.
Although this may seem like a significant year-over-year decline, it is important to note that Saskatchewan Agriculture’s first estimate of the 2017/18 spring wheat crop was 38 bushels per acre, which means that the crop got bigger as the harvest went on.
For further perspective, in last week’s digest, we reminded you that Alberta Agriculture says that their provincial spring wheat yield was looking like 46.1 bushels per acre. That is 13% below the 5-year average of 53.1 bushels per acre and 17% below last year’s average haul of 55.5 bushels per acre. They too, like Saskatchewan Agriculture underestimate the size of the province’s spring wheat crop.
Nationally, Statistics Canada said last Friday that spring wheat yields would average at 46.6 bushels per acre. That figure is below the five-year average of 48.9 bushels per acre.
Ultimately,.GrainCents will continue to monitor falling Canadian production, lower global stocks, and increasing pressure on European and Russian output and exports, and their impact on spring wheat prices. If you want to be more on top this sort of thing so you can make more sense of grain markets, join us for your free trial at GrainCents.