Canadian wheat exports seen surging on lower Australia output

Canadian wheat exports might be heading toward the biggest volume in six years following a bountiful harvest in Canada and sharply lower output from rival shipper Australia. A projected 26 percent decline in wheat production in Australia, the world's second-biggest wheat exporter last year, ahead of Russia and Canada, will give Canadian supplies a larger foothold in Southeast Asia, a federal agriculture analyst said.
The United States was the No 1 wheat exporter last year. Agriculture and Agri-Food Canada predicts that Canada will export 18.75 million tonnes of all wheat in the current 2012/13 crop year, the highest level since 2006/07. Much of that volume would have to move in the second half of the crop marketing year, which runs from August 1 through July 31.
In the first five months through December, Canada has exported nearly 7.6 million tonnes of all wheat, up a modest 6 percent year over year, according to Canadian Grain Commission data. The all-wheat category includes spring wheat, durum and winter wheat. Traditional buyers of Canadian supplies such as Indonesia, Japan, Philippines, South Korea, Malaysia and Sri Lanka have bought more Canadian wheat year over year.
"All these companies buy from Australia, and one reason they're buying from Canada this year, probably the main reason, is Australia had much lower production than last year," said Stan Skrypetz, a wheat analyst at Agriculture Canada. "So they have to come in some place else." Australia production estimate for 2012/13 edged higher on Tuesday to 22.077 million tonnes, but that would be about 26 percent lower than the previous year.
Smaller crops in Australia and Russia, due to adverse weather, have also left India poised to export dramatically more wheat this year, but still less than half of Canada's expected volumes. The brisk Canadian export pace coincides with the first year of an open market in Western Canada, after the federal government passed a law that ended the Canadian Wheat Board's marketing monopoly on August 1.