Frequently Asked Questions
“ Will there be any upside to Hard Red Spring Wheat? My wheat is all No. 1, but protein average is about 10.5 per cent.”
“ The short answer is no. The long answer is that there are plenty of options out there for world wheat buyers as we move toward our summer months. ”
The short answer is no. The long answer is that there are plenty of options out there for world wheat buyers, especially as we move toward our summer months. While the United States had a small crop last year, and their carryover will continue dropping year over year, this is already well priced into the market. Other origins, notably Australia and more specifically Canada, are seeing big crops struggle with logistics. Agriculture Canada is calling for our wheat carryout to more than double. At 9.2 million tonnes, it would be our biggest wheat carryout in 20 years. No. 1 wheat will certainly help you hit some higher quality markets. However, those markets also tend to want higher protein in the range of 13.0 per cent and up. When protein is in the 10.5 range, it has to compete with a large number of lower-protein origins going to customers who don’t require No. 1 quality. By and large, Canada had a fairly high quality crop in 2013 with more than 80 per cent of the crop graded No. 1 or No. 2. In addition, we had a lower protein crop, with the overall average below 13.0. There will be some small rallies in the futures markets going forward, but those rallies will probably be limited to 25-cent moves. The general trend will continue to be weak. There’s always the possibility of short crops this coming year, but we’re not going to see that happen until sometime in the late spring or early summer.