WINNIPEG (Reuters) — Canadian farmers are harvesting their biggest wheat and canola crops on record after favourable weather produced large yields, Statistics Canada said on Friday in its second production report of the year.
Statistics Canada pegged the all-wheat crop at 33.026 million tonnes, up nearly eight percent from its August estimate of 30.6 million tonnes and slightly exceeding the average trade expectation of 32.9 million tonnes.
The crop erased the previous record high of 32.1 million tonnes set in 1990.
Canola production looked set to reach 15.963 million tonnes, up nearly nine percent from the previous estimate for 14.7 million, but falling below the average trade guess of 16.6 million tonnes.
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The previous record of 14.6 million tonnes was set in 2011.
Canada is the world’s biggest canola grower and exporter, and the second-largest wheat exporter.
Estimates for wheat and canola crops are likely to rise further when Statistics Canada issues its final production numbers in December, since the latest farmer survey took place in early September, with much of the crop left to be harvested, said Dave Reimann, a market analyst for Cargill Ltd.’s grain marketing services division.
The huge wheat supplies from Canada will likely cut into U.S. wheat exports once the quality of the crop becomes clear over the winter, Reimann said. The record canola harvest means supplies look comfortable, even with strong demand from exporters and crushers, he said.
“With the expectation that the crop will turn out to be larger, it wouldn’t surprise me to see canola (prices) remain under some pressure in the long run,” Reimann said. “If the implications are even larger, then we need to find some more demand.”
ICE Canada November canola futures pared losses after the report before resuming their slide, dipping one percent.
Favourable summer weather conditions led to higher than normal crop yields, overcoming late spring seeding, Statistics Canada said.
It’s estimated average canola and all-wheat yields of 36.9 and 48 bushels per acre respectively were easily the best on record.
“Quite a remarkable year,” John Duvenaud, an analyst at Wild Oats Grain Market Advisory, said on a conference call organized by Minneapolis Grain Exchange. “There was lots of moisture in the ground, so it got off to a good start. Soil conditions were perfect, then in August it turned hot.”
Crops of durum wheat, barley and oats are also significantly higher than last year, while the harvests of grain corn and soybeans are smaller.
Crop quality also looks impressive, although wheat protein will be lower than usual, Duvenaud said.
The biggest concern for farmers and the industry this autumn will be finding room to store the crops and then move them quickly to ports, he said.
