Saskatchewan Agriculture\u2019s Crop Planning Guide 2025<\/a>.<\/p>\nThey would need a price of $8.54 to $10.46 to cover their total expenses.<\/p>\n
GrainFox analyst Neil Townsend agrees that it\u2019s going to be a tough year for Canada\u2019s wheat growers.<\/p>\n
\u201cFarmers are being tested in terms of their break-even points and turning a profit,\u201d he said.<\/p>\n
However, every operation has different cost structures and yields, so posting a loss is not a foregone conclusion.<\/p>\n
\u201cThere\u2019s still some profitability in there,\u201d said Townsend.<\/p>\n
\u201cI mean, everybody planted. I didn\u2019t hear about anybody saying they weren\u2019t planting wheat.\u201d<\/p>\n
Growers are not getting much help from winter wheat crops around the world.<\/p>\n
In July, the U.S. Department of Agriculture forecast an average winter wheat yield of 54.2 bushels per acre, the second highest behind 2016.<\/p>\n
The U.S. hard red winter wheat harvest was three-quarters complete as of Aug. 8. Samples from Texas, Oklahoma, Kansas and Colorado show protein is similar to last year.<\/p>\n
Winter wheat yields are also looking good in the European Union and the Black Sea regions.<\/p>\n
\u201cThe lack of any major bullish news in the marketplace is the cause of lower prices,\u201d said Kehrig, who prepares SaskWheat\u2019s weekly Wheat Market Outlook in conjunction with his colleague Derek Squair.<\/p>\n
\u201cThere is simply an abundance of new crop grain hitting the global market with a lack of any major issues in the regions taking the crop off.\u201d<\/p>\n
For instance, France is expected to harvest a crop of 30 million tonnes, up from 25 million tonnes last year. The total EU crop is estimated to be 12 per cent larger than last year.<\/p>\n
Russia and Ukraine have some problem areas but also some good areas.<\/p>\n
\u201cThey seem to be kind of offsetting each other,\u201d he said.<\/p>\n
Townsend said winter wheat is not getting much help from what is expected to be an enormous U.S. corn crop.<\/p>\n
However, he noted that there are reports of some winter wheat quality problems in the EU and Black Sea regions.<\/p>\n
That bodes well for North America\u2019s spring wheat demand, which has been strong for a few years running.<\/p>\n
Townsend thinks the spring wheat price premium could expand this year.<\/p>\n
Kehrig said there is one factor that is going to drive the wheat market going forward.<\/p>\n
\u201cIt will all depend on how the North American spring wheat crop comes off,\u201d he said.<\/p>\n
\u201cThat\u2019s going to give a lot of direction.\u201d<\/p>\n
If yields are less than anticipated, that could bolster spring wheat prices and provide a sales opportunity for farmers.<\/p>\n
Kehrig said the spring wheat supply and quality picture will sort itself out in September.<\/p>\n
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