Big Canada wheat crop vies with U.S. for export sales
Protein content in wheat, which is important to the fermentation process in making bread, has an inverse relationship to yield. The more robust the yield, the lower the protein.
Last year, Canada Western Red Spring wheat averaged 13.9 percent protein, up from 13.1 percent in 2011 and 13.4 percent in 2010, according to the Canadian Grain Commission. Data for the current crop is not yet available.
Canada is not the only exporter with big wheat supplies. Wheat also looks ample in the Black Sea region and Australia.
"When a buyer raises his hand, he's going to have a lot of options," the wheat exporter said. "This will be a buyer's market and the sellers are going to have to get very creative."
U.S. wheat exports are off to a torrid pace in the marketing year that began June 1. U.S. exporters loaded and shipped more wheat for the week ended Sept. 12 to global buyers than any time in at least the past 23 years, with most of the grain headed for China and Brazil.
Canadian spring wheat will also face competition from U.S. hard red spring wheat. As in Western Canada, mild weather produced better-than-expected yields in the northern U.S. Plains, with lower protein content.
Canada exported 14.3 million tonnes of spring and winter wheat in the 2012/13 crop year, which ended July 31, up 7 percent from the previous year, according to the Grain Commission. Exporters shipped another 4.2 million tonnes of durum, up 18 percent.
Canada's biggest wheat markets were Japan, the United States and Indonesia.
For Canada to be competitive, it will have to overcome logistical challenges. Along with huge wheat production, Western Canada is expected to harvest a record-large canola crop.
Such high volumes are already straining the ability of Canadian National Railway Co and Canadian Pacific Railway Ltd to quickly move the grain to ports in British Columbia and Eastern Canada, where storage space has been hard to find, Ross said.
"We can buy it and sell it, we just can't move it today."