Wheat Market Outlook and Prices

The Wheat Market Outlook is provided by Mercantile Consulting Venture Inc.


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World Wheat Overview:


  • Statistics Canada published their first report on expected seeded acreage by crop for 2017 last Friday (April 21/’17).
  • Nationally, Statistics Canada expects Canadian farmers to seed 23.2 million acres of all varieties of wheat in 2017. Total wheat acreage is virtually unchanged from last year.
  • At 22.4 million acres (virtually unchanged from last year), Prairie producers are expected to seed 91% of the total Canadian wheat acreage.
  • Alberta anticipates wheat acreage to be up 9% to 7.4 million acres, a possible record high, but less area is expected to be dedicated to durum, down 8.5% to 1.1 million acres.
  • Saskatchewan farmers expect wheat area to decrease 2.5% to 12.1 million acres. This is due to an 18.8% drop in durum acres, to an anticipated area of 4.1 million acres. Spring wheat acreage is expected to increase by 9.1% to 7.5 million acres.
  • Farmers in Manitoba intend to plant 2.8 million acres of wheat, down 9.6% from 2016.

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Wheat Market Outlook

Significant events this past week:

  • Futures: Kansas City and Chicago wheat futures fell sharply (contract lows in KC) whilst Minneapolis fared better on the planting/weather concerns for US and Canadian spring wheat.
  • Funds: Spec funds added another 7,667 contracts to their net short position in Chicago Wheat Futures and options.
  • EU: EU wheat futures closed down on a firm €uro, a wetter Black Sea forecast, weakening cash values in Russia and the lower CBOT.
  • Consensus suggested that dryness in the west was a bigger concern than the cold in the east, and there is very little rain in the forecast. There are already some water restrictions in place in France, and concern will grow as we head into May.
  • Conditions in the east, Balkans and Black Sea remain generally good however, and the real threat to France would be another year of a small crop compounded by low prices in the Black Sea. Cash premiums and port data suggests a continued improvement in shipments from the EU.
  • Argentina: Argentine Fob values dipped by US$3/mt with 12% protein offered for May at US$190/mt plus US$4/mt per month, but with bids $5-8 lower. The 11.5% protein wheat discount remained unchanged at US$10/mt with 11% protein a further US$5/mt less. Farmer selling rose to 10.8 million mt against just 6 million mt last year.
  • Bolsa De Cereales published their first estimate of new crop acreage at 5.5 million ha up 8% on this year, with a crop number of 17.5 million mt given normal weather. Soil moisture levels are good and new crop prices are favourable.
  • Australia: Australian Fob values fell about US$4/mt on the week and sowing has begun in both Western Australia and Queensland with recent rains providing generally good conditions.
  • The US agriculture attaché for Australia lowered cereal exports to 22 million mt for 2016/17 and 18M in 2017/18. This means that wheat ending stocks in Australia will be greater than expected.
  • Russia: The Black Sea was quiet with values nominally unchanged, although it remained tough to find a firm buyer in front of the US$15/mt old crop-new crop inverse. New crop feed wheat was again the most traded item, ending the week with a bid-offer spread of US$159-164/mt. The harvest C&F shorts to both the EU and Asia have reached volumes which may be hard to cover.

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Primary Elevator Bids

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Primary elevator bids data source: PDQ

Grade Spreads in Canadian Dollars

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Relevant FOB Prices and Calculated Basis

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CLICK HERE to learn what the basis is and why it is important.

adobe-acrobat-pdf-file-512 CLICK HERE for the full report in PDF.

For the archived wheat market outlook and price reports, please CLICK HERE.