THE 2018 WHEAT crop was a high quality crop that met the needs of end users in terms of strong falling numbers, decent test weight, and good protein levels. For a full indication of wheat quality, you can review the Ontario Wheat Quality Scoop at www.gfo.ca/wheatquality.
Ontario produces wheat on anywhere from 500,000 to one million acres annually. This range is usually determined by weather. A cool, wet fall that slows down soybean harvest tends to limit wheat plantings; whereas, a warm dry fall, tends to allow for more acres of wheat to be planted. Price plays a role, as does crop rotation, but weather trumps either one.
For the fall of 2018, there is an estimated 870,000 acres of winter wheat planted. If we assume an average yield of 80 bushels per acre, we will have 1.8 million tonnes of winter wheat to market next year.
Regardless of the total acreage, the wheat must find a market in order to benefit everyone in the supply chain, from farmers, to elevators, to millers, to consumers. Traditionally there are three markets for Ontario wheat:
Ontario is well suited to move grain to nearby domestic flour mills and feed mills. Likewise, many U.S. flour mills are within range of direct shipment from Ontario. Truck and rail can efficiently move grain to these markets. Ontario also has many port facilities that can source volumes necessary for movement into the U.S. or international markets.
Ontario flour mills can grind approximately 500,000 tonnes of Ontario wheat annually. With the yields we can achieve, we do need other markets to sell our wheat into. The feed trade does buy wheat along with other feed grains; however, this is influenced by the relative cost of corn versus the cost of alternate feed sources.
Internationally there is strong demand for wheat, and an equally strong supply. Quality of grain is important, but it’s usually price that determines who is awarded international tenders. Ontario wheat must compete with a plethora of global competitors. When you figure in foreign exchange rates and shipping costs, there are many global players who have a cost advantage over Ontario. That is not to say we cannot export wheat internationally, it just means that we are now competing on a worldwide level.
Grain Farmers of Ontario will offer a new approach to our marketing seminars in 2019. We will offer a series of webinars of approximately 45 minutes in length. Farmers can register for whichever topic they are interested in.
We will start off with a series on the Introduction to Futures, followed by the Introduction to Options. Additional seminars will cover Technical Analysis. Check www.gfo.ca/marketing for details. •