Wheat will lose ground to canola and barley in 2009, according to Agriculture Canada.
In its Jan. 26 outlook, the agency predicts a 1.3 million acre decline in wheat and durum will largely be offset by a 316,000 acre hike in barley and a 642,000 acre increase in canola.
“I have no big quarrel with their estimates,” said John Duvenaud, analyst with the Wild Oats Grain Market Advisory.
Oversupply of wheat in 2008 has driven down prices to $6 per bushel from highs of $15.
“I’m pretty sure acres are going to be down, even though nothing else is crying to get planted,” he said.
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Agriculture Canada forecasts 18.3 million acres of wheat and 5.6 million acres of durum, down 869,000 and 420,000 acres respectively.
Darren Frank, analyst with FarmLink Marketing Solutions, said winter wheat plantings were down 530,000 acres. He thinks spring wheat acres will be flat and durum will fall 300,000 to 400,000 acres.
“I don’t see durum going down much more than that,” he said.
Errol Anderson, analyst with ProMarket Communications Inc., thinks Agriculture Canada’s durum number is about right. He said the Canadian Wheat Board will move only about half of this year’s crop.
“It’s probably going to take another year or year-and-a-half to get our way through this oversupply of durum,” he said.
Canola plantings are forecast to rise four percent to 16.8 million acres but production will fall by 10 percent, assuming a return to normal yields.
“I can see the canola acres being strong because the canola tends to pencil out on the high end of profitability,” said Anderson.
The big story in global crop production in January was the drought in Argentina, the world’s No. 3 soybean producer that helped push canola futures back up to $10 per bu.
“In the scheme of things, (canola) is probably a pretty good crop to be growing,” said Duvenaud.
“I think we’re pretty much maxed out on canola. But hey, you know what? You can always squeeze your rotations a little bit more.”
Frank is calling for about the same amount of canola as 2008 because it is a crop that is heavily reliant on inputs and has some rotational constraints.
Agriculture Canada expects 9.7 million acres of barley, up three percent over last year’s crop.
“I’m not sure why they would put barley up because it has not exactly been a good one. That surprises me a bit,” said Anderson.
Duvenaud said wheat took barley acres in 2008 and barley will reclaim some of that ground in 2009.
Frank predicted static barley acres because while malting prices pencil in a profit, anything sold for feed will remain at a significant discount until the livestock industry rebounds, and that is still a ways off.
Anderson said there is plenty of time for seeding plans to change before spring. The main variable to watch in that regard is crop pricing.
“There is a high probability there will be a degree of grain price improvement going into spring,” he said.
“One (crop) that could really be a bit of a sleeper is wheat.”
Argentina and China are experiencing droughts that could restrict production. And while there may be a glut of low quality wheat on the market, that is not the case for the high quality product Canadian farmers produce.
