Canadian wheat prices struggle amid tariff uncertainty and global competition

The Canadian Western Red Spring wheat market continues to face low prices amid a slowdown in activity from ongoing uncertainty surrounding tariffs and contract changes.

Since President Trump’s last-minute announcement of a pause on tariffs on Jan. 31, market participants have adopted a cautious approach, waiting to for clearer information on tariff outcomes and prices fell in response

Platts, part of S&P Global Commodity Insights, assessed CWRS prices leading up to the announcement at $275.21 on Jan. 30 and $273.38 on Jan. 31 then $267.68 on Feb. 3.

Compounding this uncertainty, MIAX announced plans to migrate its trading data from CME’s Globex platform to its own platform, ONYX, while CME is set to launch its own competing wheat contracts. According to some sources, the transition may prompt some traders to shift away from the MIAX contract, leaving the market in a state of limbo until MIAX’s exit from CME on June 30.

CWRS prices have been on the decline since June 2024, with the Platts assessed 13.5% CWRS wheat FOB Vancouver 30-45 days forward price hitting an all-time low of $253.17/mt on Aug. 26, 2024. Prices have since come up but have remained in the $260- $280/mt range.

Market participants attribute the downtrend to intense competition from global high-protein wheat supplies from Australia and South America, which each had substantial harvests this season. While much of Australia’s wheat exports have in the past gone to China, recent trade tensions have slowed Chinese purchases, resulting in an increased supply of Australian wheat available at a discount to Canadian wheat.

The recent USDA World Agricultural Supply and Demand Estimates put additional downward pressure on the wheat market this week, with projections of decreased trade and ending stocks. Global wheat exports were projected to fall by 3 million tons to 208.99 million tons from the January WASDE report.

Looking ahead, clarification on tariffs after the 30-day pause may revive the CWRS market from this lull. Additionally, the Canadian dollar, which weakened significantly in 2024, has recently rebounded after the tariff pause announcement. A stronger Canadian dollar could aid in a market recovery.

Tags: prices, Canada, wheat