Scorching temperatures in western Canada are pushing prices for spring wheat and canola to record highs.
The hot, dry weather is likely to hurt the harvests of both wheat and canola, making whatever survives this growing season more valuable.
Active contracts for spring wheat are now changing hands for $8.34 U.S. a bushel on the Minneapolis Grain Exchange, its highest level since 2013. Prices for spring wheat were high before they rose by more than 10% this week.
Farmers now expect the quality and quantity of the spring wheat harvest this year to be decimated by the heat that’s blanketing western Canada and the U.S.
Only about 20% of the U.S. spring wheat harvest is deemed to be in good or excellent condition right now, according to the U.S. Department of Agriculture. This time last year, almost 70% of the spring wheat crop was in good condition.
According to U.S. Wheat Associates, the export market development organization for the U.S. wheat industry, "Drought conditions have worsened, raising abandonment and yield concerns."
The situation with canola looks even worse because this year’s crop comes on the heels of what was one of the best years ever for the crop in 2020.
This year's canola harvest will be much smaller, which is why the price of what's available is skyrocketing. The spot price for canola hit a record high of more than $800 U.S. per metric tonne on Monday (June 28) of this week. That's the highest price on records that date back to 1982.