Canada wheat exports surge with better crop, weather

Fri Jun 1, 2012 11:08am EDT

* Last harvest had better quality than 2010/11
    * Wheat exports up 18 pct; durum sales climb 17 pct
    * Colombia buys more under FTA; Iran wheat imports up

    By Rod Nickel	
    WINNIPEG, Manitoba, June 1 (Reuters) - Canada's wheat
exports have bounced back strongly with bigger and better
2011/12 supplies from a year earlier and near-ideal weather for
moving grains by rail from the Prairies to ports.	
    A larger crop last autumn, with typical quantities of
top-quality grades after a sub-par previous harvest, stoked the
appetite of Canada's biggest export buyers of spring wheat, used
mainly for baking.	
    Mills in top buyer Mexico bought more than twice as much
Canadian wheat - over 900,000 tonnes - from August through
April, while the United States and Japan imported 41 percent and
31 percent bigger volumes respectively, Canadian Grain
Commission data shows. 	
    "What you're seeing is the impact from that poor-quality
(2010/11) harvest into a better-quality harvest for both spring
wheat and durum," said Bruce Burnett, director of weather and
market analysis at the Canadian Wheat Board, which owns a
marketing monopoly for western wheat and barley from the 2011/12
year, which ends July 31.	
    Canada is the top exporter of spring wheat and durum.	
    In a year of poor quality, like 2010/11, more of Canada's
wheat tends to be used domestically as livestock feed, Burnett
said.	
    From August through May 27 of the 2011/12 crop marketing
year (August/July), Canada exported more than 11.7 million
tonnes of wheat excluding durum (a category that mainly reflects
spring wheat), up 18 percent year over year.	
    During the same period, Canada exported 3.2 million tonnes
of durum wheat, used for making pasta, up 17 percent.	
    While exports are up sharply year over year, based on
longer-term averages they should finish the 2011/12 year around
normal levels, Burnett said.	
    Along with Canada's usual big wheat customers, exports grew
sharply to Colombia, after a free-trade deal took effect last
August, and to Iran, which has scrambled to secure food amid
economic sanctions that have complicated financial transactions.	
    Colombia bought 668,000 tonnes of Canadian wheat from August
through April, more than twice their purchase volumes a year
earlier, while Iran imported 166,000 tonnes from zero reported a
year ago.	
    Black Sea region wheat growers returned to a major role in
the global wheat trade in 2011/12 after severe drought the
previous year, but those countries produce mostly lower-quality
wheat that don't compete directly with Canada, Burnett said.	
    The weather during winter and spring was also much better
for moving Canadian commodities by rail, a wheat exporter said,
after the previous year of avalanches and spring floods hampered
rail movement.	
    "This is probably one of the best shipping years we've ever
had in terms of weather delays," said the exporter, who did not
have permission to speak publicly and spoke on condition of
anonymity. 	
    Rail is the main way grains from Western Canada move to
port, with no river freight system. Canada's No. 2 railroad
Canadian Pacific Railway Ltd, resumed freight service on
Friday after Ottawa ordered striking workers back to their jobs
following a more than week-long strike. 	
    The brisk export pace counters suspicions in the grain trade
that the Wheat Board might hold over some 2011/12 supplies past
Aug. 1, when it will no longer hold a marketing monopoly.	
    Western Canadian farmers are now planting what's expected to
be a bigger area of wheat for the 2012/13 year, after two
straight years of spring flooding.	
    Spring wheat supplies from the United States also look to be
larger, with farmers in the northern Plains nearly finished
planting well ahead of schedule and 79 percent of the crop in
good to excellent condition as of Sunday. 	
    Lower-protein Canadian spring wheat also competes with U.S.
winter wheat, which has suffered from hot, dry weather that
caused its condition to deteriorate last week, according to the
U.S. Department of Agriculture.
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