Canola, wheat outlook smaller than expected

WINNIPEG (Reuters) — Canadian farmers will harvest less canola and wheat than expected and fall short of last year’s production, an Aug. 30 Statistics Canada report showed.

Hot, dry weather across the Prairies was expected to curb yields, although patchy rain left crops in better shape in some areas.

In the government’s first report on this year’s harvest, it said canola production would reach 19.2 million tonnes, down 10 percent from last year and below the average trade guess of 20.2 million tonnes.

Statistics Canada pegged the all-wheat harvest at 29 million tonnes, down three percent from last year and short of the average trade expectation of 30.6 million tonnes.

Output may be better than the report’s estimates because Statistics Canada surveyed farmers in July, when they were more pessimistic about yields, said Brian Voth, president of IntelliFarm Inc.

Yield results in Manitoba suggest the harvests may be slightly larger, he said.

Lower Canadian wheat output will help support global prices, with dry conditions also crimping crops in Europe, the Black Sea region and Australia, Voth said.

A scorching summer has ended five years of plenty in many wheat-producing countries and drawn down the reserves of major exporters to their lowest levels in a decade.

“You’re getting a lot of whiplash in the markets,” Voth said. “It tells you the wheat market in general is nervous about where wheat supplies are going to be.”

The size of the canola harvest will hinge largely on results from the biggest producing provinces of Saskatchewan and Alberta, he said.

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