Global wheat markets surged this week following a surprising downgrade in U.S. winter and spring wheat crop ratings. What does it mean for the overall wheat market direction? For this RealAg Market Update, RealAg Radio host Shaun Haney is joined by Brian Comeault of Ireland Comeault Lafoy.
The USDA dropped its winter wheat rating from 52 per cent to 50 per cent good to excellent, catching analysts off guard. More notably, the first spring wheat condition report came in at just 45 per cent good to excellent, well below the market expectation of 70 per cent.
Comeault says the low spring wheat rating could reflect excess rainfall across parts of the Dakotas, which may be causing water-related stress in fields, despite general concerns about dryness in other areas. "There's been a significant amount of rain... maybe some drowning or issues related to excess moisture," he says.
In Canada, rainfall has been less generous. While some parts of the Prairies have received rain, moisture reserves remain limited. “We’re still in this need-rain-at-the-right-time mode,” Haney says.
Looking at acreage, Comeault expects Canadian wheat acres to align with Statistics Canada’s projected year-over-year increase. Strong wheat cash prices and high input costs for canola may also shift more acres toward wheat, he said.
Despite the USDA projecting 900 million bushels in ending stocks, Canadian wheat exports remain strong. “There’s a confidence in doing business with Canada,” Comeault says, pointing to ongoing demand despite ample global supplies.
With weather conditions and acreage shifts in flux, he says producers are returning to the basics in crop planning. Wheat, once again, is a top consideration.
