CWB predicts large crop in most areas


Production estimates show 20 million tonnes of wheat

Western Canadian farmers who are already enjoying near-record prices for cereal grains are also on track to produce one of their biggest crops in years.

Bruce Burnett, a weather and crop specialist with CWB, said last week that 2012 production of wheat, durum and barley in western Canada is likely to surpass levels in 2010 and 2011.

With the exception of dry areas in southeastern Manitoba and B.C.’s Peace River region, most prairie farmers are benefitting from good growing conditions and ample moisture.

Production estimates released by CWB July 31 pegged western Canadian wheat production, excluding durum, at approximately 20 million tonnes, nearly 1.4 million tonnes higher than 2011 and well above the five-year average.

Durum production was estimated at 4.46 million tonnes compared to about 4.2 million last year and barley production was projected at 8.04 million tonnes, up from 7.3 million tonnes in 2011.

“Crops are looking in very good shape across the Prairies … and for the most part, prairie yields look to be good this year,” said Burnett.

For western Canada’s producers, the combination of high prices, above average domestic production and significant production shortfalls in other key exporting regions could translate into a rare and lucrative prairie harvest.

Widespread drought throughout much of the United States has taken a significant toll on American grain production and has pushed wheat futures to their highest levels in recent memory.

According to figures provided by CWB, American corn production is estimated at around 290 million tonnes, down from 313 million last year and well below the five-year average.

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In 2009-10, American corn growers produced a crop of more than 330 million tonnes.

“The drought in the North American corn belt has sent (grain) prices up toward record levels … and we are now looking at wheat prices between $9 and $10 per bushel on the futures markets,” said CWB president Ian White.

Unfavourable weather is also affecting producers from other major exporting nations including Russia, Ukraine, Kazakhstan and Australia.

In Australia last week, officials from CBH Group told Bloomberg News that grain yields for 2012-13 could drop by as much as 40 percent in Western Australia, the country’s largest grain producing and exporting state.

CBH is the largest grain handling company in Western Australia.

Western Australian grain farmers took off a record harvest of nearly 15 million tonnes in 2011-12.

This year, CBH officials estimated total grain production in the state in a range of nine to 11 million tonnes.

Production in the Black Sea region is also projected to fall significantly from last year’s levels, said Neil Townsend, CWB director of market research.

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A projected crop of less than 65 million tonnes would mean small Black Sea exports and greater demand for wheat produced in other areas.

“Kazakhstan is actually in pretty dire condition right now and in fact, they might be unable to (produce) any exports other than flour this year,” said Townsend.

“This is a significant factor (because it means) that especially from the east coast of Canada and North America, there’s going to be a considerable export pull this year.”

According to Townsend, wheat markets in the Mediterranean Basin should be very strong and prices for Canadian wheat should remain high throughout the 2012-13 marketing campaign.

Global production shortfalls mean that foreign buyers will become increasingly dependent on North American markets to meet their import needs.

“There’s probably a deficit of about 10 or 12 million tonnes of wheat that probably has to come from North America,” he said.

CWB also released year-end figures from the 2011-12 crop year, its last as a single-desk seller of wheat and malting barley grown in Western Canada.

The wheat board had net revenues of $6.3 billion in 2011-12 and total exports of 18.1 million tonnes, including 13 million tonnes of wheat other than durum, 3.6 million tonnes of durum and 1.1 million tonnes of barley.

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Domestic sales were listed at 2.15 million tonnes for wheat, 225,000 tonnes for durum and one million tonnes for barley.