After a disappointing United States March Prospective Plantings report Ankush Bhandari, vice-president of economic research for Viterra for the U.S. and Mexico, said he thinks Canadian farmers need to plant the biggest spring wheat crop in 20 years.
A senior grain industry executive hopes Canada’s spring wheat growers step up after a disappointing United States March Prospective Plantings report.
Growers in that country said they intend to plant 10.57 million acres of spring wheat, the smallest crop since 1972.
Ankush Bhandari, vice-president of economic research for Viterra for the U.S. and Mexico, said that will cause a dearth of high protein wheat in North America.
U.S. hard red winter wheat stocks are at the lowest level since 2007, he said. And the new crop in the ground is in trouble, with only 28 percent of it rated good-to-excellent as of April 2.
“While there is plenty of wheat in the world, namely in Europe and in Russia, the U.S. protein situation remains tight and quality is still a concern,” Bhandari said during a webinar organized by the U.S. Soybean Export Council.
“The onus really is on our friends up north, the Canadians.”
He thinks Canadian farmers need to plant the biggest spring wheat crop in 20 years.
MarketsFarm analyst Bruce Burnett expects a four to five percent increase in Canada’s spring wheat acres.
At the high end of his estimate, that would be 18.9 million acres, the second-largest crop since 2001.
Burnett thinks growers in the eastern Prairies who couldn’t get a crop in last year will plant wheat.
The dismal condition of the U.S. hard red winter wheat (HRWW) crop should also provide strong incentive to plant spring wheat, he told growers attending the MarketsFarm Spring 2023 Market Outlook webinar.
U.S. farmers produced 531 million bushels of HRWW last year, down from the previous five-year average of 733 million bu.
If conditions do not improve in the Southern Plains, farmers could harvest 475 to 500 million bu. this year, despite a 13 percent increase in winter wheat acres, he said.
Production by the world’s major wheat exporters is expected to fall to 379 million tonnes in 2023-24, down from 395 million tonnes in the current marketing year, due primarily to smaller crops in Russia, Australia.
Ending stocks are also forecast to fall, which is why Burnett is puzzled by the recent slide in global wheat prices.
He also doesn’t think the market is paying enough attention to increasing hostilities in the war in Ukraine. The war premium has evaporated from the market.
Burnett forecasts 28.5 million tonnes of Canadian non-durum wheat production in 2023-24, which would be similar to last year.
He thinks there will be another robust 20 million tonne export program and a “very tight” carryout of 3.32 million tonnes, just slightly above this year’s estimated 3.22 million tonnes.
Burnett thinks old crop wheat prices could climb back to the $13 per bu. level if the U.S. hard red winter wheat crop continues to deteriorate.
He was also bullish on durum due to the second year of devastating drought in North Africa.
Last year’s drought was centered on Morocco. This year it has shifted east to Algeria and Tunisia.
Production is forecast at 4.35 million tonnes, only a 200,000-tonne improvement from last year. A normal crop would be five to six million tonnes.
“We foresee strong durum demand next year from this region,” he said.
It is also dry in southern Spain, southwest France and southern Italy. If that persists, there will be a smaller European Union crop.
“It should provide a lot of support for us as we go into the next marketing year,” said Burnett.
Canadian durum plantings are forecast to drop by about 250,000 acres, while U.S. farmers intend to increase their plantings by 190,000 acres.
Canadian production is forecast at 5.1 million tonnes, down from last year’s 5.44 million tonnes. Carryout is pegged at 650,000 tonnes, up slightly from the 2022-23 estimate of 600,000 tonnes.
Canadian cash durum prices are in the $11 to $12 per bu. range, down about $1 from where they were at the start of the calendar year.
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