ICE weekly outlook: Time gap too large in StatCan report

MarketsFarm — There has been about a one-month gap in between Statistics Canada having gathered its data for next week’s principal crops report and actually releasing the report.

That’s something trader Ken Ball of PI Financial in Winnipeg finds irksome.

“They’re using computer models of some kind. You would think they could get this out quicker. It would be much more useful to us if the data were a week old instead of a month old,” Ball said.

StatCan is scheduled to issue its report on Monday (Aug. 29). Over the course of August, crops on about two-thirds of the Prairies have seen potential yields diminish, according to the trader.

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Ball predicted the federal agency will peg this year’s canola crop at around 20 million tonnes, given its data was mostly collected before things turned a little sour on the Prairies. He indicated he would not be surprised if the actual harvest were to come in at about 18.5 million tonnes.

“That’s a pretty mediocre crop,” Ball said, but better than last year’s drought-stricken 12.6 million tonnes of canola.

He said the commercials see the reduced production in Western Canada and they’re banking on a large canola harvest in Australia to fill any shortfalls.

Ball noted that despite the price levels for canola, it remains relatively cheap compared to other vegetable oils. That could help in generating a bit of a rally before harvest is fully underway on the Prairies.

Added to that, he said the Pro Farmer Crop Tour will have an effect on the Chicago soy complex and corn. The eastern and western legs of the tour have been finding yields for the two crops well below than what was previously anticipated. That could mean the U.S. Department of Agriculture (USDA) needing to adjust its estimates come its September supply/demand report.

Any shortfall in U.S. soybean production will push up prices, with spillover coming to canola.

Also, Ball pointed out the extent of the dry conditions in South America. After the September long weekend, the weather in Brazil and Argentina most often plays a major role. Should those countries come up short in their seasonal rains, that could push up oilseed prices as well.

— Glen Hallick reports for MarketsFarm from Winnipeg.

Table: Average of 2022 Canadian crop estimates by 14 traders and analysts, ahead of Statistics Canada’s Canadian crop production estimates due out Monday, Aug. 29, 2022. Table compiled by Rod Nickel of Reuters in Winnipeg. Estimates in millions of metric tonnes.

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