By Phil Franz-Warkentin, Commodity News Service Canada
Winnipeg, Dec. 2 – Canada’s major agricultural crops likely yielded a bit better than earlier estimates, and most industry participants anticipate Statistics Canada’s production numbers will be revised higher in a report out Dec. 4.
However, the extent of those adjustments could be limited.
“The (production) numbers will probably go up for all commodities . . . wheat, durum, barley, canola should all see increases to varying degrees,” said CWB market analyst Bruce Burnett.
He said the previous survey was conducted in September when the harvest was just getting started.
“When farmers did actually get on the fields, I think yields exceeded expectations,” Burnett added.
“If we don’t see an increase in the production estimates, depending on the commodity, it will be fairly bullish,” said Burnett.
He said durum was one crop that will be watched closely, as that crop already saw a slight downward revision in the Oct. 3 report, and the supply-demand fundamentals are tight.
Early pre-report estimates are calling for Canadian durum production of 4.6 million to 5.4 million tonnes, which would compare with the previous StatsCan estimate of 4.756 million and the 2013-14 level of 6.505 million.
All-wheat production, which includes durum, is forecast at 27.4 million to 28.1 million tonnes, which compares with the October forecast of 27.481 million and the year-ago level of 37.530 million tonnes.
While actual yields may have been up slightly from the previous report, production “for virtually all commodities will be down by 20 to 25 percent from last year,” said Burnett.
Canola production will also be watched closely, as the supply-demand fundamentals are also considered tight.
After growing a record large 17.966 million tonne canola crop in 2013-14, estimates on the size of the 2014-15 crop range from about 14.0 million to 14.9 million tonnes. StatsCan pegged production at 14.079 million in the earlier report.
“If the crop is unchanged, or only up a couple hundred-thousand tonnes, it won’t be enough,” said Ken Ball, of PI Financial in Winnipeg.
“We really need something closer to 14.8 million tonnes of canola to balance things out, and if it’s not there it could cause a reaction (in the market).”
While anecdotal harvest reports are pointing to better yields, some of the yield increases may be countered by adjustments in harvested acres.
“We’re still not sure what the acres will do,” said Keith Ferley, of RBC Dominion Securities in Winnipeg.
“We might see a pull down in acres and a bump up in yields,” which could cancel out any changes to the total production number.
The following is a summary of pre-report trade estimates ahead of the Statistics Canada production report.
Production in million tonnes.
Pre-Report StatsCan StatsCan
Ideas Oct. 03
durum wheat 4.600 – 5.400 4.756 6.505
all wheat 27.400 – 28.100 27.481 37.530
oats 2.600 – 2.800 2.685 3.906
barley 7.000 – 7.400 7.119 10.237
flaxseed 0.900 – 1.000 0.922 0.724
canola 14.000 – 14.900 14.079 17.966