It is that time of year again with quite a bit field activity going on across southwestern Ontario. There is even some corn that has already been planted here by some of the early birds and of course sweet corn is going in with the good weather of the last week. Your loyal scribe even got busy side dressing his wheat crop with nitrogen.  Last fall had such lovely weather it led to the largest wheat crop in Ontario history. As I was driving a tractor with a fertilizer spreader through the field, I could only reflect on what that might mean.

What it probably will mean is that we won’t have $15/bu wheat off the combine this coming summer like we did last.   I know that I have been harping on that for quite some time but then again nobody knows. I have cautioned all of us along the way that the war in Ukraine in Russia will continue to be a wild card in that market. Needless to say, even with wheat stocks down around the world wheat prices don’t seem to be reacting to any of that stimuli.

Or maybe that is just conjecture because we know that the markets are always right. This past week the USDA came out with their latest WASDE report, putting US wheat stocks at 598 million bushels which was above the trade expectation but still the lowest ending US wheat stocks in the last nine years.  Globally, old crop wheat stocks were projected at 265.05 MMT, which is slightly less then where we were in the March estimate.

You would think that that would give a little bit of bounce to wheat prices, but that is not the case as we have seen soft red winter wheat futures prices drift down since last November. It seems that all the risk premium was taken out of the initial shock of the hot war in the Black Sea wheat region.  We still have the hot war, but there seems to be wheat turning up everywhere that it is needed.

Then there is that big Ontario wheat crop that looks incredibly vibrant in the field.  Keep in mind that this Ontario crop is about 44% bigger than the Ontario wheat crop we had last year. If we have a good production spring and summer, we might be looking at about 3.2 MMT.  Unfortunately, the demand side for wheat isn’t quite what it is domestically like it is for Ontario corn.  Our Ontario milling capacity is approximately 664,000 MMT, so you know something has to give.

We’ll have to feed some of it to livestock or ship it out on the export markets where the proverbial common denominator is the word “cheap”.  In fact, that word works pretty good for all agricultural commodities that reach the high seas. So, you may have got $15 a bushel for your wheat last year but currently the market is offering about $8 a bushel for the same type of wheat.  That’s largely due to a Canadian dollar that has been floating around the 72 to 74 cent U.S. dollar range.

Of course, could it be such a perfect world?  The answer to that is no.  Every Ontario wheat producer knows it’s difficult to get that wheat to the elevator in a condition that is acceptable. Quality issues can be huge.  You must remember that wheat is one of the only crops that we expose to four different seasons. In other words, you accept different risks over the fall, winter. spring and summer. In fact, sometimes you can even lose wheat on the way to the elevator in July as it crosses the grading table. There is so much risk inherent in growing Ontario wheat.

Those risks have let some farmers in Ontario to reduce their acres of wheat or even stop growing it altogether. However, there are some very well-known Ontario government extension agents who have put together long-term studies of how wheat in the rotation increases your long-term profitability in growing crops.  So, there is always a motivation to plant the wheat, but at the end of the day much of that motivation lies in good planting weather like we had last fall.  It can be fickle to get the wheat in the ground in the first place so when a fall like last year comes along, we ended up with 1.3 million acres plus.

Keep in mind that wheat is grown pretty well everywhere, planted and harvested almost every month of the year somewhere.  Egypt has always been the country with the highest per capita consumption of wheat. If we could mimic that in many other countries of the world, we could dry up those global wheat stocks and maybe increase the price of wheat for Ontario farmers. However, we know the world doesn’t work that way.  I’ll settle for a push for far more Ontario milling capacity in the future. That’s always been part of my value-added agricultural argument.

So, as we look ahead let’s hope the Ontario wheat crop ends up as good as it looks now.  It’s a long and winding road on the way to harvest payday. There are so many marketing factors that are at play along the way. Let’s hope that $15 a bushel wheat card shows it face again.