Commodity markets were temporarily shocked by government reports
released June 28, but quickly return to gazing anxiously at struggling
crops in the field.
“The market is focused on the weather,” said Alberta Agriculture market
analyst Charlie Pearson.
“Right now yield is more important than seeded acreage. That’s where
things could change big.”
On June 28 the United States Department of Agriculture and Statistics
Canada released their seeded acreage reports.
Both roiled the commodity markets.
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“It’s a day of some surprises,” said Pearson.
Soybean futures jumped in Chicago after the USDA report estimated about
one million fewer soybean acres than analysts expected. That should
reduce harvest acreage by about one percent from last year.
But the USDA found more corn acres than expected, which held back what
has been a surging feedgrains market. About four percent more corn
acres were planted this year than last year, though that’s still one
percent below the acreage of 2000.
Analysts had expected that seeding delays in the Midwest would cause
more farmers to shift corn acres to faster-maturing soybeans.
Wheat prices on U.S. exchanges initially dipped with the news that the
USDA found more spring wheat acres and stocks than traders expected.
The bearish USDA numbers were balanced by the bullish impact of weather
problems on the U.S. and Canadian plains. Wheat futures ended the day
little changed.
Statistics Canada’s numbers also rattled traders, who were surprised
there are fewer barley acres and more canola acres than expected.
But the markets didn’t take it too seriously, some analysts say.
“I think their numbers are rubbish,” said analyst Errol Anderson of Pro
Market Communications.
Ken Ball of Benson Quinn GMS said farmers were doing a lot of crop
switching during the spring seeding period, so surveys such as these
are likely to be off-base.
The survey was of 29,100 farmers and was done May 24 to June 4, before
many areas got rain.
“I think those numbers are too old and there has been too much chaos,”
said Ball.
“Right now I don’t think anyone has a handle on what’s out there.”
For the major prairie crops such as wheat, canola and barley, the more
important factor now is weather.
Huge swaths of prairie farmland are in precarious positions because of
the drought.
“Going from 20 bushels per acre of canola to 30 bushels per acre on
average will have a lot bigger impact on the markets than changes in
seeded acreage,” said Pearson.
Statistics Canada found that small acreage crops have seen a lot of
changes this year from last year.
Oats acreage is the highest in 25 years, at 5.5 million acres. That’s
well above the 10-year average of 4.2 million acres and 27 percent
above last year’s acreage.
Chickpea acreage has collapsed from more than 1.1 million acres to
about 500,000 acres.
Lentils have dropped by 17 percent to 1.5 million acres.
Canaryseed acres have jumped by 68 percent to 705,000 acres, which is
well above the 1996 record of 615,000.
Dry bean acres in Manitoba have expanded, taking Canadian production to
record highs.
