Grain market analysts have zero faith in Statistics Canada’s April 27, 2018, seeding intentions report.
The report is based on a survey of 11,600 farmers conducted between March 2-29.
“A lot of things have changed since then,” said Greg Kostal, president of Kostal Ag Consulting.
One of the biggest changes has been to the prairie drought map.
“Golly, in the winter we’re talking it’s too dry, there are big red spots on the map,” he said.
“Now there’s seeding delays (because it’s) too wet.”
He believes the “drought psychology” that existed when farmers were surveyed in March is the big reason why they told Statistics Canada they were going to plant 21.4 million acres of canola, well below the Reuters average trade estimate of 23.7 million acres.
Kostal expects farmers will switch back to canola now that late-winter and early-spring snow and rainfall have lessened that drought mentality.
“Maybe canola is not going to reach 24 million acres, which is what I think most people were thinking, but why can’t we get to 23?” he said.
Kostal thinks the additional canola acres will come out of spring wheat. Statistics Canada shocked many analysts with its forecast calling for 25.3 million acres of wheat, way above the average trade estimate of 23 million acres.
Errol Anderson, analyst with ProMarket Wire, said the seeding intentions report was “bizarre” and he called for changes at Statistics Canada.
“The StatsCan model, it’s wrong. It is broken and they have to fix it. Somebody there has to shake up that department,” he said.
Anderson said the canola, wheat, barley and pulse estimates are all dead wrong.
“Other than that, everything is hunky-dory,” he said.
He is forecasting 24.3 million acres of canola, rather than the 21.4 million acres farmers told Statistics Canada they were planting.
“Of course growers want the canola price to be up. They want the trade to think there’s not enough acres and you know, why not?”
He said the trade completely ignored the report.
“If it was anything real, November canola would have been limit up,” said Anderson.
He said there is no way wheat acres are on the rise and that the barley number should be closer to 6.8 million acres because exports are nearly double the previous year’s pace.
“The difference is China is using our feed barley to make beer,” he said.
That is driving up the price of feed barley in Canada, as is the poor railway performance that is preventing U.S. corn from moving north.
One of the biggest surprises in the report was that farmers appeared to be sticking with pulses despite losing the Indian market.
Statistics Canada is forecasting 3.9 million acres of peas, down marginally from 4.1 million acres in 2017, and 4.1 million acres of lentils, down from 4.4 million acres last year.
Reuters’ pre-report survey of traders showed they were expecting 3.5 million acres of each crop.
Kostal thinks Statistics Canada’s pea number might be bang on because yellow pea prices are back in the $7 per bushel range and there are new markets for the crop in the fractionation industry and in China’s feed manufacturing sector.
However, he does not believe the lentil number is realistic because exports have been sluggish. He figures plantings will end up somewhere between the trade estimate of 3.5 million acres and Statistics Canada’s 4.1 million acres.
Kostal figures there could be more soybeans than the official 6.5 million acre estimate and more flax than the 989,000 acres Statistics Canada is forecasting because the entire oilseed complex has received a boost since farmers were surveyed in March due to Argentina’s disastrous soybean harvest.