Wheat Market Outlook and Prices

The Wheat Market Outlook is provided by Mercantile Consulting Venture Inc.


Wheat Market Outlook – February 3, 2025

Canadian Wheat Exports to the U.S.

Source: Mercantile, based on GATS and STC data

  • Markets are reacting to the news over the weekend that the U.S. will implement tariffs on all Canadian, Mexican, and Chinese exports beginning on Tuesday, Feb. 4, 2025.
  • The Canadian dollar was down 1.5 per cent overnight and most of the grain commodities were lower as well.
  • Regarding wheat, exports to the U.S. account for nearly 8 per cent of all Canadian wheat exports. Non-durum wheat exports to the U.S. average 7 per cent of all Canadian. exports, while durum is more exposed to the U.S. market at 12 per cent.
  • Most of the wheat exported is 1HRS>13.9pro, followed by 2HRS<13.0 pro.
  • Most of the Canadian wheat that is exported to the U.S. is from Manitoba. Exports through the Pembina ND customs district average 44 per cent of the total exports to the U.S. Exports through the Great Falls MT customs district are just 4 per cent of all exports to the U.S.
  • The tariff situation remains fluid. This morning, we learnt that Mexico and the U.S. agreed to postpone the tariffs for an additional month. This has sparked optimism that Canada might be able to broker a similar deal when the Prime Minister meets with the President today.

Global Wheat Production and Trade

There is a lot of competition in the wheat markets as wheat is produced around the world. Below is a brief synopsis on last week’s market events in the major wheat origins.

FUTURES

  • 2025 contract Chicago winter wheat closed at $559-4, down 7-0 cents on Friday, up 15-4 cents on the week.
  • 2025 contract Kansas winter wheat closed at $579-2, down 9-0 cents on Friday, up 19-6 cents on the week.
  • 2025 Minneapolis hard red spring wheat closed at $615-4, down 4-6 cents on Friday, up 20-2 cents on the week.
  • U.S. wheat futures are currently 3-7 cents higher at the time of writing over the news that tariffs on Mexico would be postponed until March 1st.

Canadian Wheat

  • March spring wheat contracts continued to climb last week. Spring wheat was supported by comments by officials that the U.S. might not implement tariffs, but corrected lower on news that the tariffs were on.
  • Canadian non-durum wheat exports in week 25 were 349.3k mt. The season total of 10.1 million mt remains one per cent behind last year.

Source: Mercantile, based on CGC data

Canadian Durum

  • Canadian durum exports in week 25 were strong at 179k mt. The season total of 2.7 million mt remains 80 per cent ahead of last year.

Source: Mercantile, based on CGC data

Global Durum

  • Tunisia bought 100k mt of Feb-Apr durum for US$340.28-US$349.89/mt. This is roughly US$5/mt more than what Tunisia paid in its last tender on Dec. 19, 2024. We calculate that this is worth about CA$9.50/bu at the elevator in Saskatchewan. This is roughly 30 cents more than what we calculated the last tender was worth.

Source: Mercantile

  • There were some $10+/bu bids in Southern SK last week. We would move to 80 per cent sold old crop durum at these levels (minus freight costs).

U.S. Wheat

  • U.S. wheat futures continued their upward trajectory last week over concerns of winter kill in the U.S. winter wheat belt and slowing Russian exports.
  • Below normal temperatures extended across the U.S. winter wheat belt last week. Temperatures dipped 10-12 degrees Fahrenheit below average. Limited snow cover left the winter wheat crop exposed to the elements, increasing the risk of winter kill.

Source: USDA

  • U.S. export sales for the week ending Jan. 23, 2025 were at the high end of expectations at 456.1k mt. Total outstanding sales are 18.1 million mt, up 8 per cent from last year vs the USDA’s forecast for a 20 per cent increase in exports.
  • U.S. Hard Red Spring (HRS) for Mar. 25 is valued at $289.00mt FOB Pacific Northwest (PNW) (up $4.00/mt from last week) FOB Gulf Hard Red Winter (HRW) 12/13.5 pro is valued at $269.00/mt (up $8.00/mt from last week); Gulf HRW 11/12.5 pro is at $262.00/mt (up $8.00/mt from last week).

Australian Wheat

  • Wheat markets in Australia were quiet as Chinese buyers are off for the New Year.
  • FOB values in Australia: Mar. 2025 Australian Premium White Wheat (APW), Western Australia was valued at $261.00/mt (down $3.00/mt from last week).

Argentine Wheat

  • The trade is watching for an uptick in farmer sales in Argentina because of the reduction in the export tax. Weekly sales data has not shown this yet.
  • FOB Argentine 12 pro wheat upriver for Mar. 2025 is $00/mt (unchanged from last week).

Indian Wheat

  • February forecasts are calling for hot and dry conditions in India. This could impact the growing wheat crop there. India will need a strong wheat crop to replenish very low old crop stocks.

EU Wheat

  • The France AgriMer kept its wheat export forecast for the 2024/25 season at 3.5 million mt, reflecting a 33 per cent drop in exports from last season. Low wheat exports are the result of a smaller harvest, competition with Black Sea wheat, lower Chinese demand, and political tensions with Algeria.
  • EU FOB prices: 2025 French 11 pro wheat closed at $249.00/mt (up $4.00/mt from last week); Mar. 2025 German 12.5 pro wheat closed at $257.00 (up $4.00/mt from last week); Mar. 2025 Baltic 12.5 pro wheat closed at $255.00/mt (up $4.00/mt from last week).

Black Sea Wheat

  • SovEcon decreased its estimate for Russian wheat exports by another 900k mt to 42.8 million mt. Russia will export about 11-12 million mt of wheat during the remainder of the season, which is approximately half of the volume shipped in that period last year.
  • We have Russian FOB values for 12.5 per cent protein wheat for Mar. 2025 at $240.00/mt (up $7.00/mt from last week).

Significant Purchases/Trades

    • Tunisia bought 100k mt of Feb-Apr milling wheat for $$260.77-$263-55/mt and 100k mt of durum for $340.28-$349.89.
    • Jordan bought 50k mt of milling wheat at $265.25/mt. The shipping period was for the first half of June. Jordan is expected to return this week for another 50k mt for the last half of June.
    • U.S.A export sales were 456.1k mt. Total outstanding sales are 18.1 million mt, up 8 per cent from last year.

Significant Events Over the Past Week

  • In response to President Donald Trump’s decision to impose 25 per cent tariffs on all Canadian and Mexican goods (10 per cent on energy from Canadian), Canada announced its own 25 per cent tariffs on $155 billion worth of U.S. imports. Mexican President Claudia Sheinbaum also announced its own retaliatory measures to Trump’s 25 per cent tariffs, but no specifics were unveiled.
  • Monday morning, it was announced the U.S. would delay tariffs on Mexico until Mar. 1, 2025, as Mexico promises to send 10,000 service men to secure the U.S.-Mexico border.
  • Corn markets were concerned about potential retaliatory tariffs from Mexico, however, the news of the U.S./Mexico agreement this morning has corn markets back in their bullish trajectory.
  • The Canadian dollar fell 1.5 per cent overnight but has since recovered to 0.68720 (down 0.49 per cent).

Mercantile’s Weekly Outlook

Outside of the looming trade wars, Mercantile says the wheat market is well supported: conditions in many of the key growing areas are not ideal, the funds continue to hold a large short position in wheat, and buyers (Egypt) are showing more demand. Also, Mercantile believes the corn market is very strong so long as the U.S. and Mexico continue to trade. According to Mercantile, the strong U.S. dollar and trade tensions are providing headwinds. They are 50 per cent sold spring wheat and would hold sales for now.


Canadian Primary Elevator Bids

in Canadian Dollars per Bu and per MILLION MT

Data source: PDQ, Feb. 3, 2025


Grade Spreads

in Canadian Dollars per Bu and per MILLION MT

Data source: PDQ, Feb. 3, 2025


Relevant FOB Prices and Calculated Basis

U.S. & Canadian Dollars per MT


CLICK HERE to learn what the basis is and why it is important (FOB Wheat Prices and Export Basis Calculation PDF).

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