Big Canada wheat crop vies with U.S. for export sales

Fri Sep 20, 2013 12:46pm EDT
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By Rod Nickel

WINNIPEG, Manitoba, Sept 20 (Reuters) - Canada's biggest wheat crop in more than two decades will send supplies from the No. 2 wheat exporter into unusual places, battling head-on with U.S. wheat, grain traders said.

Canadian farmers are expected to harvest 30.6 million tonnes of wheat this autumn, counting all varieties, according to Statistics Canada. Nearly two-thirds of the crop, or almost 20 million tonnes, is destined for export, Agriculture and Agri-Food Canada forecast this week.

Such ample supplies and expectations of lower-than-usual protein levels have created attractive prices for buyers, said Rhyl Doyle, director of export cereals for Paterson Grain.

"These kind of prices and protein profile will give us the tools to put it into a lot of places," he said. "If the price is right, that's the key, and our farmers are sellers."

Canada is the world's second-biggest producer of spring wheat, which is used to make breads, crackers and noodles, as well as the No. 2 producer of durum wheat, a main ingredient of pasta. The biggest Canadian grain handlers are Richardson International, Viterra and Cargill Ltd.

Canada Western Red Spring wheat with 12 percent protein was available this week at British Columbia ports for $283 per tonne, some 10 percent or $30 per tonne cheaper than U.S. hard red winter wheat with the same protein at the Gulf of Mexico, Doyle said.

"The Canadian prices will push Canadian wheat into a lot of hard red winter markets, even where you have a substantial freight disadvantage (from Canada)," Doyle said.

Wheat with mid-scale protein levels from Canada and the United States will vie for sales, particularly in Latin America and Africa, he said. This year, Canada looks to have smaller-than-usual supplies of high protein wheat (above 13 percent) that usually moves into western Europe and Asia, but there should be enough 13.0 percent protein wheat for Japan to make breads and noodles, Doyle said.   Continued...