Canada Drought Brings Worst Grain Harvest In Six Years
Statistics Canada published forecasts for the 2023 grain harvest. Canadian farmers will be able to harvest 14.2% less grain this year than in 2022 due to the drought that hit the western provinces in previous months.
According to government analysts, the total wheat crop will not exceed 29.5 million tons due to the heat wave that hit the western provinces of Alberta and Saskatchewan especially hard. Forecast of the rapeseed-canola crop in Canada is also below the 2022 results: 17.6 million tons are expected to be collected, which is 6.1% less than a year ago.
In the summer of 2023, a drought affected many agricultural regions of North America. Overall, US and Canadian farmers will be able to produce just over 5.7 million tons of durum wheat in the 2023-2024 season. After a poor 2021 crop, this will be the second worst crop in Canada and the USA in six years. The forecasts immediately led to a significant increase in prices, which immediately affected Canadian FOB deliveries, particularly due to raised transport costs to 668.21 Canadian dollars per ton. However, in the United States, the futures Durum index in Chicago declined to $10.50 per bushel, thus opening a period of volatility related to speculative profit taking.
Meanwhile, Russia increased grain exports by 27% in August compared to the same month in 2022. According to the Russian Union of Grain Producers, “from August 1 to August 27, Russia exported 6.4 million tons of the main types of grain.” In particular, wheat exports increased by 29% to 5.35 million tons, barley by 15% (910 thousand tons), corn by 1.6 times to 166.8 thousand tons. Preliminary data indicates that in August 2023, Russia has exported 7.3 million tons of grain, including 6.1 million tons of wheat.
According to Russian Minister of Agriculture Dmitry Patrushev, “as of August 30, 105 million tons of grain have been harvested in Russia.” The forecast for the 2023 harvest is 123 million tons, of which wheat is at least 78 million tons.