The U.S. Department of Agriculture cut its global wheat production forecast by two percent due to very dry conditions in Western Canada, as well as some northern U.S. states and parts of Russia.

“The big declines were in Russian and Canadian wheat (estimates) at 12.5 million and 7.5 million tonnes respectively,” said Marlene Boersch with Mercantile Consulting Venture in Winnipeg. “The size of the cuts exceeded trade expectations.”

The Australian wheat crop estimate rose 1.5 million tonnes, while Ukraine was 3.5 million tonnes higher. Boersch notes wheat stocks are down in the eight major exporting countries. This is bad news for importing countries because lost production is not easily replaced.

Durum wheat supplies are also very tight with prices at very high levels.

Boersch compiles a weekly report for the Saskatchewan Wheat Development Commission.

Wheat Market Outlook and Prices — Sask Wheat Development Commission