Canada Markets

USDA WASDE Report Shows Favourable Estimates for Canadian Wheat

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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The July 12 USDA WASDE report saw an upward revision in the forecast for Canada's all-wheat production potential of 1 mmt, to 34 mmt, while the export forecast was revised higher by 1 mmt, to 25 mmt. The blue bars represent Statistics Canada's reported all-wheat exports, the yellow bar is AAFC's June estimate for the upcoming crop year while the green estimate is the USDA's latest estimate. (DTN graphic by Cliff Jamieson)

The July 12 World Agricultural Supply and Demand Estimates (WASDE) report saw the USDA revise higher its forecast for Canada's all-wheat production by 1 million metric tons, to 34 mmt. This is close to 1 million higher than the June Agriculture and Agri-Food Canada (AAFC) estimate of 33.092 mmt, the latest in the process of estimating production that will continue until the combines roll in fall and even longer.

Based on Statistics Canada's latest acreage estimates, this would indicate an all-wheat yield of 50.2 bushels per acre (bpa), which is 1 bpa higher than currently estimated by AAFC, up from the 34.8 bpa average yield estimated in 2021 while higher than both the five-year average of 47.3 bpa and the 10-year average of 47.6 bpa. If this calculation was made excluding the drought year of 2021, the result would be slightly lower than the 2016-to-2020 average of 50.9 bpa.

The USDA also included an upward revision in Canada's export potential, with exports pegged at 25 mmt, up 1 mmt from last month. As seen on the attached graphic, this is up sharply from AAFC's estimate of 14.8 mmt for 2021-22 while also above AAFC's estimate of 22.2 mmt released in June which could be revised when the July report is released, likely in the next week. If achieved, exports at this level would only be 1.3 mmt short of the 26.3 mmt record achieved in 2020-21.

Of course, it is early and all estimates will be a moving target; what is encouraging overall in today's data release was an increase in the forecast for global exports. Today's estimates included an 880,000 mt increase in the forecast for global exports to 205.47 mmt. Of the eight major global exporters, Canada and the United States were the only countries to see an upward revision in output potential this month.

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