Grain market analysts think production numbers for the major crops will come in higher than Agriculture Canada’s Aug. 1 projections, with the possible exceptions of barley and canola.
“If harvest co-operates, I think all these numbers are going to get bigger,” said Greg Kostal of Kostal Ag Consulting, one of three analysts brave enough to toss out projections for the 2008 crop.
On Aug. 22, Statistics Canada is scheduled to release its first production estimate of the year based on a poll of 15,100 farmers between July 25 and Aug. 4.
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Kostal thinks the agency’s report will lowball the crop because it was done before a spell of exceptional crop growing weather in early August.
For instance, he expects Stats Can’s durum number will be 5.2 million tonnes, which is what Agriculture Canada used in its Aug. 1 supply and disposition report.
But Kostal thinks the number will be closer to 5.5 million tonnes by the time harvest wraps up and he is forecasting 21 million tonnes of spring and winter wheat, up from Agriculture Canada’s projection of 19.9 million tonnes.
“It’s a cereal year in many regards, providing we can get it off and it’s not a quality wreck,” he said.
Darren Frank, market analyst with FarmLink Marketing Solutions, is predicting 5.2 and 20 million tonnes respectively for the durum and wheat crops.
A third Winnipeg analyst, who requested anonymity, has penciled in 5.2 and 23.6 million tonnes. His barley number was 9.7 tonnes, which was the lowest of the analysts’ forecasts and 800,000 tonnes below Agriculture Canada’s estimate.
“At this stage we’re a little bit uncertain on abandonment,” said the incognito analyst.
Frank is forecasting 10.1 million tonnes of barley. He projects fewer harvested acres than Agriculture Canada, suspecting more acres will be cut for green feed as livestock prices have flattened out.
“I just think we’ll be back to a more normal abandonment,” he said.
Kostal bucked the trend toward discounting Agriculture Canada’s barley estimate, calling for 11 million tonnes of the crop, although he thought it could be as high as 11.5 million tonnes.
“Alberta is the one province with the best yield potential and barley is a big crop there,” he said.
Their oat estimates were all fairly close, ranging from 3.4 to 3.8 million tonnes, all near Agriculture Canada’s 3.5 million tonne projection. Kostal and Frank, who were on the high end, felt abandonment would be low because prices are good and there is not as much incentive to bale or graze the crop.
Frank and the anonymous analyst both pegged the canola crop at 10.2 million tonnes, well below Agriculture Canada’s 10.6 million tonnes.
“Some people are still under 10 million tonnes. At this stage of the game, I think that we’re probably still looking at something above 10,” said the anonymous analyst.
Frank said Agriculture Canada is out to lunch on this one.
“I just think overall their yields are too high.”
Kostal was again the contrarian, forecasting a 10.75 million tonne crop, despite an estimated 300,000 tonne loss in the Peace district of Alberta.
“That would only be a 31 bushel yield. That’s not out of whack,” he said.
All three analysts expect a bigger flax crop than the 725,000 tonnes Agriculture Canada has in its supply and disposition report. The estimates ranged from 740,000 to 750,000 tonnes.
“It looks very good but it’s late. We’re going to need a long fall,” said Frank.
Pea estimates ranged from 3.15 to 3.35 million tonnes compared to Agriculture Canada’s 3.16 million tonne forecast and there is plenty of upside potential.
“My bias would be higher on that crop right now,” said Frank.
All in all, the analysts were pleased with crop progress to date.
“Certainly the crops in Manitoba are all progressing along very nicely and I think things have improved a little bit in some of the areas of Saskatchewan and Alberta, although there are obviously still some trouble pockets,” said the nameless analyst.
Frank said the crops look good but producers are still running behind schedule. Any wet weather during harvest could hurt durum quality.
Spring wheat growers who have decent protein should be rewarded in the 2008-09 crop year.
“Protein will probably fetch a little bit of a premium this year compared to the last two years where it really hasn’t,” he said.
Kostal said cold and wet weather would be detrimental at this stage of the game.
“Yield is largely set. It’s just what quality will be here forward.”
