There’s Not Enough Extra Canadian Wheat to Fill Global Shortfall

(Bloomberg) -- One of the world's top wheat exporters won't be able to fill supply shortfalls caused by Russia's invasion of Ukraine after drought withered its own grain inventories.

Dry conditions zapped as much as 40% of Western Canada's grain output, and finding additional supplies to export would be a “struggle,” said Phil Speiss, commodity futures broker for RBC Dominion Securities in Winnipeg, Manitoba. Stockpiles of wheat in Canada dwindled to 15.6 million tons at the end of December, down 38% from a year earlier, government data show.

“Most of the grain we have in Canada is spoken for already,” Dean Dias, head of Winnipeg-based Cereals Canada, said Wednesday by phone. “We are already in short supply.”

Russia's invasion of Ukraine is expected to stifle shipments from some of the world's biggest suppliers and has sent prices soaring. Wheat futures in Chicago rose by the exchange limit for the third straight day Wednesday to $10.59 a bushel, the highest price since March 2008. The current price and supply squeeze may send a signal to Canadian farmers to seed more wheat in 2022, Dias said.

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