Europe’s wheat loss is a win for Canadian farmers.
After a scorching summer fried wheat crops across the European Union, the bloc is set to lose its position as the world’s third-largest exporter as Canada usurps the title, according to the U.S. Department of Agriculture. The agency Friday cut its outlook for EU wheat exports by 16 per cent to a six-year low.
Things could still get worse for Europe as the USDA’s production outlook was "at the higher-end of market expectations," according to Rabobank International, a lender to the farm commodities trade.
"There is scope for additional cuts in the future, which would translate into lower exports," Charles Clack, a Rabobank analyst in London, said of the forecast for EU wheat production. "EU 2018-19 stocks are already very low."
Wheat exports from the EU will drop to 23 million metric tons in the 2018-2019 season, 1.5 million tons below the USDA’s estimate for Canadian shipments. Production in the 28-member bloc was estimated at 137.5 million tons, also the lowest in six years.
Swaths of southwestern Saskatchewan and southeastern Alberta, Canada’s largest growers of spring wheat and durum, received less than 60 per cent of average rainfall since April 1, according to government data. Still, the USDA kept its production and export forecasts for the nation unchanged.