Canada Markets

The October USDA WASDE report saw a lower revision in the forecast for U.S. wheat exports in response to the agency's recent lower revision in U.S. wheat production. This month's estimate of 21.092 million metric tons of U.S. wheat exported would be the smallest U.S. volume exported since 1971-72, according to USDA FAS tables, although by a narrow margin. In 2015-16, exports were reported at 21.168 mmt.

This level of activity is forecast to lead to the tightest U.S. ending stocks since 2007-08, or 15 years. The average of pre-report estimates was pointing to even tighter stocks than estimated by the USDA this month.

Contrast this to Canada data. The USDA left Canada's exports unchanged at 26 mmt this month. If achieved, this would be up sharply from the 15.128 mmt exported in 2021-22, and would be in the running for record exports, with 26.332 mmt exported in the 2020-21 crop year. The USDA views Canada's potential as better than seen in AAFC's forecasts, which have pegged Canada's 2022-23 all-wheat exports at 23.2 mmt.

Given USDA data, Canada's wheat exports would exceed U.S. exports for only the third time in data going back to 1960-61, while by far the largest amount of 4.908 mmt. According to the USDA, Canada's stocks would increase by 367,000 metric tons from the official Statistics Canada estimate for 2021-22 to 4.17 mmt, which is well below the current AAFC forecast of 6.3 mmt.

It's also interesting to note that the USDA's data shows global stocks of wheat (excluding China) to fall to the lowest level reached in 15 years. The stocks estimate for the top eight global exporters totals 55.69 mmt, the tightest stocks for this group in 10 years.

Despite the response by traders in today's session, bullish data remains for the global wheat market, and Canadian producers may be well-positioned to take advantage.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Follow Cliff Jamieson on Twitter @CliffJamieson

(c) Copyright 2022 DTN, LLC. All rights reserved.