Commodities Buzz: USDA Estimates Flat Canadian Wheat Production In MY 2018/19

As per the latest estimates of United States Department of Agriculture (USDA), Canadas wheat production for MY 2017/18 was down seven percent to 29.98 million metric tons (MMT), on lower durum yields and reduced area seeded to spring wheat (down less than a percent), to durum (down 15 percent) and to winter wheat (down 20 percent). In line with historical rates, 98 percent of all wheat seeded was harvested. Total wheat, spring wheat and durum area seeded in MY 2018/19 are expected to remain below fiveyear averages, but total wheat area is forecast higher, led by a three percent increase in area seeded to spring wheat. Dry conditions in the prairies and lower anticipated returns for lentils and dry peas are expected to drive spring wheat area higher in MY 2018/19, while durum area is forecast flat on weak export demand and relatively soft prices. In MY 2018/19, total wheat production is expected to remain similar to the MY 2017/18 level, as additional spring wheat area and better durum yields offset lower spring wheat yields. While improved wheat genetics helped boost MY 2017/18 yields in regions that received minimal rain during the growing season, high subsoil moisture at planting was critical to realizing superior water use efficiency yield gains. Unless soil moisture conditions improve by planting, MY 2018/19 yields would drop, regardless of genetic improvements in water use efficiency. Approximately 95 percent of the MY 2017/18 Canadian Western Red Spring (CWRS) crop was graded in the top two milling categories. The average CWRS protein level (all grades) was 13.0 percent, slightly below the 13.4 percent ten-year average. CWRS accounts for more than 75 percent of total wheat production in Canada. The Canadian Prairie Spring Red (CPSR) crop exactly matched the 12.1 percent ten-year average. The MY 2017/18 average durum protein level was 13.6 percent, well above the ten-year average of 12.9 percent, with 95 percent of the Saskatchewan crop within the top two grades (well above the ten-year average of 57 percent) and 85 percent of the Alberta crop within the top two grades (up from the five-year average of 71 percent).