Statistics Canada surprised the market with a canola estimate below what many analysts had expected, and canola futures are up Thursday morning.
The agency pegged Canadian canola production at 13.36 million tonnes of which the Prairies accounted for 13.2 million tonnes.
That is down about eight percent from last year and is the result of a 17.5 percent drop in average yield to 28.2 bushels per acre.
At about 10 a.m. CST, November canola is trading at about $609, up $14.40 from the close on Wednesday. The price is down a little from the high hit after the Statistics Canada report was released.
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Varied precipitation and warm temperatures were generally beneficial for crop development across Alberta during the week ended July 8, according to the latest provincial crop report released July 11.
There is a chance that the crop will be even smaller than StatsCan’s number because the report is based on survey of 11,657 farmers Sept. 4-11 and the big windstorms that scattered swathes were Sept. 11 and Sept. 18.
Demand for the crop, domestic and export, will be greater than supply so the price will have be at a level that rations demand.
However, some demand could migrate to cheaper palm oil, which is suffering an excess of supply.
Canola this morning is also supported by generally rising commodities.
The U.S. dollar is down, the U.S. jobless claims report showed a smaller increase in joblessness than expected.
Also the European Central Bank had some comforting talk about the euro zone debt crisis.
Also, the U.S. Department of Agriculture said soybean export sales last week jumped to the largest in three months. Included in that, China made its largest weekly purchase since early May.
OTHER CROPS
Turning back to the StatsCan report, total wheat production is pegged at 26.73 million, up 5.8 percent from last year. That is down slightly from StatsCan’s August estimate. The trade as polled by Reuters, on average, was expecting 27.1 million.
Of that, spring wheat production is 18.64 million tonnes, up 3.4 percent from last year.
Durum is 4.398 million tonnes, up 5.4 percent. The trade, on average had expected 4.5 million tonnes.
Winter wheat is 3.694 million, up 20.8 percent from last year.
Barley production is 8.591 million, up 10.8 percent. The trade on average had expected 9.2 million tonnes. The Winnipeg ICE Futures Canada barley contract has not traded today.
Oats is 2.939 million, down two percent. The trade expected 2.8 million.
Peas are 2.743 million, up 9.7 percent from last year. The trade expected 2.9 million.
Flaxseed is 518,000 tonnes, up 40.7 percent. That was pretty much what the trade expected.
This story will be updated with special crops numbers later this morning.
