By Rod Nickel
WINNIPEG, Manitoba, Oct 3 (Reuters) – Canada will produce slightly less wheat and not as much canola as expected, volumes well short of last year’s all-time record levels, a Statistics Canada report showed on Friday.
The crops would still be the third-largest wheat harvest in 18 years and third-biggest canola crop ever, in a year of bountiful global wheat and oilseed supplies.
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Statscan pegged the all-wheat crop at 27.48 million tonnes, slightly less than its August estimate of 27.7 million tonnes and the average trade expectation of 28 million tonnes. Last year’s record harvest was 27 percent larger.
Canola production looked set to reach 14.08 million tonnes, slightly above Statscan’s previous estimate of 13.9 million but below the average trade guess of 14.6 million tonnes. The 2013 record-large harvest was 22 percent bigger.
ICE Canada November canola futures initially extended their gains after the report, before moderating to rise 0.4 percent in morning trading. MGEX December spring wheat eased.
Statscan’s projections may have modestly underestimated the size of wheat and canola crops, said Ken Ball, commodities broker at PI Financial Corp. Statscan conducted its survey of farmers from Sept. 4 to 14, around the time of the first significant frost across much of the Prairies.
The estimates “might have reflected a fairly pessimistic outlook,” Ball said. “I don’t think we’re seeing any huge surprises in yields, but there seems to be a general feeling that about half the Prairies are pulling in better yields than expected” since the survey period.
Statscan pegged average yields at 43.7 bushels per acre for all wheat, down 18 percent, and 32.1 bushels for canola, down 20 percent.
Canada is the world’s third-largest wheat exporter and the biggest shipper of canola, used largely to produce vegetable oil.
Another factor that lowered the estimated size of most crops were reductions by Statscan in harvested area, reflecting damage from flooding and heavy rain in eastern Saskatchewan and western Manitoba, said Bruce Burnett, weather and crop specialist at grain marketer CWB.
“We’re now dealing with (estimated) areas that are a little bit more realistic,” Burnett said on a conference call organized by Minneapolis Grain Exchange.
Statscan also estimated smaller than expected crops of durum wheat and barley, at 4.756 million tonnes and 7.120 million respectively, well below 2013’s big production. Oat output looked to be 2.686 million tonnes, matching expectations and down sharply year over year.
The smaller than expected durum crop, combined with quality problems from cold, wet weather, should boost cash prices for the wheat used to make pasta, Burnett said.
Spring wheat grades may be lower than in the past four years, he said. About half of Canada Western Red Spring wheat (CWRS), used in baking, may fall short of the top two quality grades, Burnett said.
