Market Outlook - Wheat

• Wheat futures markets still hover near their five-year lows and futures on the front month Minneapolis contract sit at $5.52 per bushel. The last time wheat futures were at this level was December of 2020. Wheat markets continue to be fed new rhetoric towards larger crops and the recent upgrades to Argentinian wheat production levels and anticipation that the Australian crop could grow vs shrink in size has wheat markets resistant to make a move higher. The market will need to make its moves higher on demand related stories. North American demand is perceived as just fine with both U.S. demand forecasted to be strong and Canadian export pace being rapid. European and Black Sea shipping pace is behind pace, and we will need to see true demand pick up out of the region. There are a few key importers behind pace on imports, and we need to see these importers step up to the plate to keep demand moving forwards. Global wheat bids are relatively stable, some few dollar moves in FOB values each week but relatively stable. We will move out of harvest pressure in the northern hemisphere and transition into winter exporting season. Producer bids for spring wheat in the Canadian prairies sit just below $7.00 and we are still on hold for making big sales as we hover and trod along our five-year lows. Strong demand for CWRS is anticipated throughout the winter, we will be watching if U.S. trade deals or MOUs with nations such as Bangladesh on wheat pull from Canadian demand. As we head into winter another item to watch will be any drought or issues with either the European, Black Sea or U.S. winter wheat crops. Russia has some severe drought in the Rostov region, and any weather stories typically are reflected quickly in the market if notable tonnage is at risk.

Market Outlook - Durum

• The Canadian durum crop has grown through harvest as later estimates point towards a larger crop. Provincial reports point to the crop being larger than Statistics Canada with Saskatchewan provincial crop report pointing to a 41 bpa average for durum vs a 33 bpa average just one year ago. Market prices have stabilized recently, and export pace has kept up to last year's pace so far. Production is expected widely within the market to surpass Statistics Canada’s 6.5 mmt crop. Crop prices domestically have stabilized and are seeing crop prices in the $7.50 to $7.75 per bushel range across Saskatchewan and have picked up around $0.25 per bushel over the past month. Global import demand is expected to drop from 9.2 mmt last year to 8.6 mmt this year, larger global production being penciled in at 37.2 mmt vs last year's 36.4 mmt of which Canada will account for 6.5 mmt of that. The EU crop is at 8.3 mmt vs 7.2 mmt last year. Ending stocks, this year are expected globally at 7.5 mmt vs 6.7 mmt last year and Canadian durum will need to be competitive. Early exports of Canadian durum have been strong and pricing well into EU and North Africa. We are watching this trend closely and keeping an eye on export shipments in a proactive manner to analyse the movements.