CNS Canada –– Western Canadian farmers are seeing higher-quality wheat crops this year, which would help meet pent-up demand for quality within the market.
However, producers might not reap the rewards as much as they would like, one market analyst warns.
Wheat buyers will be looking for better-quality and higher-protein wheat, since Canada disappointed on some of those fronts last year, said Neil Townsend, director of market research at G3 Global Grains in Winnipeg.
“But on the other hand, when there’s more of it around, you see that the premium for protein and the premium for quality gets kind of narrowed, and that’s probably the situation that we’re in, in Canada.”
Demand still exists, he said, but since supply looks like it will be fairly heavy, this year might not be as profitable as farmers would hope.
Assumptions that this year will be higher-quality and higher-protein is primarily based off anecdotal reports, he said, as harvest is about 30 per cent done on the Prairies.
“Looks like it’s going to be a better quality profile than last year. So far the results would support that.”
Crops are not seeing as much adversity during harvest as they did last year, as many farmers have been able to get crops off, dry them and maintain quality.
“In parts of the West obviously drought has an influence on smaller yields, but the drought also is positive in terms of quality when you get a smaller crop,” Townsend said.
Statistics Canada has predicted this year’s production will be around 24.6 million tonnes, compared with last year’s 29.3 million tonnes.
— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow her at @jade_markus on Twitter.