Canada’s wheat area in MY 2022-23 seen rising 7% on higher prices, firm demand
Canada’s wheat area for marketing year 2022-23 (August-July) is expected to rise by more than 7% year on year to 25.03 million acres, according to a report released by Statistics Canada.
“An anticipated increase in area for wheat is likely attributable to strong prices and high worldwide demand,” the report said.
According to the report, spring wheat area for MY 2022-23 is seen rising to 17.6 million acres, up 7% year on year, while durum wheat area is seen increasing nearly 13% year on year to 6.2 million acres.
However, the area under winter wheat is expected to decline 13% year on year to 1.2 million acres.
The overall area under wheat in the current MY 2021-22 had declined nearly 7% year on year due to the prevailing drought situation and dry conditions.
According to Statistics Canada, farmers in Saskatchewan, the largest wheat producing province in Canada, are expected to plant wheat over 13.3 million acres of land, up 10.6% year on year.
The spring wheat area in Saskatchewan is expected to expand 7.5% year on year to 8 million acres, while durum wheat area is anticipated to increase 15.4% year on year to 5.2 million acres.
Farmers in Alberta are expected to plant wheat across 7.4 million acres, which will be up 6.3% year on year, the report said. Similarly, farmers in Manitoba are likely to plant wheat over 3.1 million acres, up 5.7% from the previous year.
Canada’s wheat FOB prices remain strong
Canada’s FOB wheat prices have remained firm over the past few months due to tightness in global supply against the backdrop of Russia’s invasion of Ukraine.
Russia and Ukraine, together, account for around 26% of the global wheat trade. Following Russia’s invasion of Ukraine, trade from the Black Sea declined sharply.
As a result, wheat prices across origins gained sharply over the past two months.
Despite a lower output and a decline in exports in MY 2021-22, Canada’s wheat export prices gained sharply due to strong global demand.
Common wheat exports for MY 2021-22 through April 17 were down nearly 43% from a year ago, while durum wheat exports were over 61% lower year on year.
Canada’s wheat export prices have gained nearly 20% since the Russia-Ukraine war, which muted Black Sea supply.
According to S&P Global Commodity Insights data, 13.5% Canadian Western Red Spring wheat, FOB Vancouver, for 30-45 days forward was assessed at $475.47/mt on April 27, up $3.86 on the day, while 13.5% CWRS wheat, FOB Vancouver, for 45-60 days forward was assessed at $477.30/mt, up $3.85/mt on the day.