Bigger crops anticipated ahead of StatsCan report

CNS Canada –– Canada’s harvest ended up better than expected in 2015-16, with upward revisions expected for the country’s wheat and canola production when Statistics Canada releases its latest survey data Friday.

“It turns out that the crop didn’t suffer as much in Alberta and Saskatchewan,” said Jerry Klassen, manager of the Canadian office for Swiss-based GAP S.A. Grains and Products, on this year’s harvest reports.

Trade estimates place canola production at anywhere from 14.5 million to 16.2 million tonnes, with most guesses coming in at around 15.5 million. That would be up from the StatsCan October estimate of 14.3 million tonnes, but still below the 16.4 million tonnes grown in 2014-15.

Canola is “a crop that’s hard to kill nowadays,” said Neil Townsend, director of market research services at G3, on the fact that production estimates are rising despite some adverse conditions during the growing season.

Canola demand from exporters and domestic crushers “does not reflect a slowdown from last year,” he said, with the solid usage pace supporting upward revisions to the production number.

While canola production will be up from earlier estimates, supplies could still be tight by the end of the marketing year.

“The most important aspect of this report for the trade will be to fine-tune ‘when’ the easy access grain supply from farmers will deplete,” said Mike Jubinville of ProFarmer Canada.

While the production estimates may rise from earlier ideas, he added, year-end stocks by July 31, 2016, will still tighten. “It’s just a matter of timing and how it is accomplished.”

For wheat, pre-report trade estimates range from about 26.1 million to 27.6 million tonnes, which would compare with the October StatsCan estimate of 26 million tonnes.

Of that total, durum production is forecast at anywhere from unchanged to up by as much as 500,000 tonnes from the 4.7 million reported in October.

Wheat export numbers are solid from Canada, which reflects a better-quality Canadian crop, said Townsend.

Buyers were taking advantage of blending opportunities, he said, and a larger spring wheat crop could increase the export program going forward.

One other crop to watch in the numbers is barley, as the fundamentals for the grain are relatively tight, said Klassen. Estimates range from about 7.3 million to 7.8 million tonnes, which would compare with the 7.6 million forecast in October and the year-ago level of 7.1 million.

Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow CNS Canada at @CNSCanada on Twitter.

Table: A quick summary of the Statistics Canada crop production estimates for 2015-16. Pre-report estimates included for comparison. Production in millions of tonnes.

Pre-report October Final,
  ideas 2015-16.     . 2014-15
Durum wheat.   . 4.700 – 5.200 4.744 5.193
All wheat 26.100 – 27.600.    . 26.061 29.419
Oats 3.100 – 3.400 3.292 2.979
Barley 7.300 – 7.800 7.610 7.119
Flaxseed 0.850 – 0.950 0.889 0.873
Canola 14.500 – 16.200 14.297 16.410

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