Canada's wheat area rises while rapeseed area falls: Grain market daily

• Old crop UK wheat futures (May-25) closed yesterday at £174.90/t, down £0.35/t on Wednesday’s close. New crop futures (Nov-25) gained £0.35/t to settle at £190.60/t over the same period.
• The UK old crop prices diverged from both Chicago and Paris markets, which were supported by stronger export sentiment after IKAR lowered Russia’s wheat export forecasts. Also, US wheat export sales for the week ending 6 March were higher than expected.
• May-25 Paris rapeseed futures dropped €2.50/t to €471.00/t, with the Nov-25 contract down €0.25/t to €461.25/t.
• EU rapeseed markets continued to face pressure from falling Canadian canola prices, driven by uncertainties over trade tariffs from the US and China. Winnipeg canola futures (May-25) were down 1.1%.

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On Wednesday (12 March), Statistics Canada released its planting estimates for main crops, showing an increase in wheat planting for 2025, while the area for canola (rapeseed) is expected to drop. The rise in wheat planting is driven by strong global demand, while canola is being affected by lower margins and soil moisture conditions in Western Canada.

Wheat planting area is expected to reach 11.1 Mha, up 2.6% from the previous year and 7.4% above the five-year average. Meanwhile, rapeseed area is projected to fall 1.7% to 8.76 Mha in 2025, slightly below the five-year average.

As a leading exporter of wheat and the largest supplier of rapeseed, changes in Canada’s supply of these crops can have a significant impact on both global and domestic prices.

The rise in wheat area is mainly driven by spring wheat, expected to grow by 2.5% to 7.8 Mha. Durum wheat is expected to remain steady at 2.6 Mha, while winter wheat will see a notable increase of 15.1% to 682.8 Kha. Although rapeseed area is set to decline nationwide, Saskatchewan (biggest producer) plans to increase its rapeseed area by 1.2% to 4.9 Mha.

In its January outlook for principal crops, Agriculture and Agri-Food Canada (AAFC) forecasts all wheat production in 2025 to reach 35.03 Mt, up from 34.96 Mt last year, driven by a larger area and average yield. However, rapeseed production is expected to fall by 1.9% to 17.5 Mt on reduced planted area.

What does this mean for the UK?

The UK imports a significant amount of Canadian wheat each year, primarily due to its high protein content. Around 30% of the wheat we import, including durum, comes from Canada. An increase in Canadian wheat production could help maintain a steady supply of high-protein wheat for our flour mills. However, this rise in supply could also put pressure on both global and domestic wheat prices, potentially affecting the cost of imports.

For rapeseed, any drop in Canadian production could push global prices higher, offering some support to the UK rapeseed market. However, the outlook is mixed across key exporters. While Canada and Ukraine are likely to see a decline, the EU and Australia are expected to increase production. As the UK is expected to price at import parity for the new crop, this could create uncertainties in the market going forward.

In summary, ongoing US and China trade sanctions on Canadian goods are a key factor to watch, as they could disrupt global trade flows and create price volatility.

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