A hot, dry growing season took a larger toll on the Canadian canola crop than most industry participants had expected to see in the latest survey results Thursday from Statistics Canada.

As a result, the market will need to work to ration demand for the commodity going forward.

StatsCan pegged the 2012-13 canola crop 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.

“The number was unexpected by about 90 per cent of the trade,” said a Winnipeg-based canola broker.

While pre-report estimates were in the 14 million- to 15 million-tonne range, “anybody who was paying attention knew the canola crop was below 14” million, said Ken Ball of Union Securities.

However, industry participants were not expecting such a small crop to show up in the official numbers until the next report in December.

The question now is whether the canola number will be revised even lower in subsequent reports, as the wind losses reported in Saskatchewan and Alberta occurred after the survey was conducted, said Mike Jubinville of ProFarmer Canada.

“It won’t be a surprise if this crop moves down to 13 million,” said Ball.

Canola, he added, was already becoming very expensive compared to other oilseeds, and the latest production numbers will lead to even more reductions in demand over the next few months.

All wheat production, at 26.7 million tonnes, was down slightly from the 27 million StatsCan forecast in its previous report, but still above the 25.3 million-tonne crop grown in 2011-12.

While the all-wheat number was not much of a surprise, Jubinville said the slight reduction should provide some positive momentum for the commodity.

Canadian 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 production 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.

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

Table: Quick summary of the Canadian crop production report released Oct. 4, 2012 by Statistics Canada. Production in millions of metric tonnes.

	September	July
	2012-13	2012-13	2011-12
Durum	4.398	4.273	4.172
All wheat	26.733	27.013	25.261
Oats	2.939	2.994	2.997
Barley	8.591	9.508	7.756
Flaxseed	0.518	0.547	0.368
Canola	13.359	15.410	14.493