Hot, dry weather took a larger toll on the Canadian canola crop than many industry participants expected.
The latest Statistics Canada survey pegs canola production at 13.4 million tonnes, a two-million-tonne drop from its previous forecast and well below the 14.5 million tonnes grown in 2011-12.
Although one Winnipeg-based broker said “the number was unexpected by about 90 per cent of the trade,” Ken Ball of Union Securities said the warning signs were there.
“Anybody who was paying attention knew the canola crop was below 14 (million tonnes),” said Ball.
However, it was a surprise to see those fears confirmed so early by StatsCan and the question now is what the agency will say when it releases its December survey.
The current survey was conducted before high winds wreaked havoc with canola swathes in Saskatchewan and Alberta, noted Mike Jubinville, of ProFarmer Canada.
“It won’t be a surprise if this crop moves down to 13 million,” said Ball.
Canola is becoming expensive compared to other oilseeds, and the latest production numbers may prompt potential buyers to make alternate plans, he added.
Other crops saw less change. All wheat production is now forecast to be 26.7 million tonnes, down slightly from the 27.0 million forecast by StatsCan in its previous report, but still above the 25.3-million-tonne crop grown in 2011-12. Durum production was pegged at 4.4 million tonnes, up slightly from the previous forecast of 4.3 million and the year-ago level of 4.2 million.
The barley number was a little low, as StatsCan lowered its estimate by about a million tonnes, to 8.6 million. That was still above the year-ago level of 7.8 million, but “suggests the balance sheet on barley will stay tight into the next year as well,” said Jubinville.
Oats and flaxseed were both revised slightly lower, at 2.9 million tonnes and 518,200 tonnes respectively.