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Weather Patterns are Reinventing Global Grain Trade Routes

The whims of the weather are reshaping global grain trade routes, according to the USDA.

After surpassing Russia to be the top wheat exporter, drought and floods experienced in the EU will see it fall back to third place this season. However, the outlook for other key exporters is much brighter, as Canada is set to see record sales; Australia is on pace to export its highest volumes in four years; and Russia is expected to regain its number one ranking.

As production in the EU falls short, Australia is forecasting a surge in wheat output of 76 percent to 26.7 million tons, after beneficial rains boosted crops following years of drought. Forecasters are even projecting that production may hit 30 million tons, positioning the country to regain a presence in the Southeast Asia market.

As the harvest continues in Russia, analysts are expecting the country to see its second biggest wheat crop on record - leading to exports increasing by 10 percent, and Russia overshadowing the EU in the EU’s traditional MENA markets.

Canada is also expected to see a record wheat crop, with expectations that its exports will surpass a previous record set in the 1990s, setting the country as a competitor with Australia in Southeast Asia.

For the U.S., a weak dollar will drive sales, however, exports are not expected to change much from last year, although they are still expected to surpass those from the EU.

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