Better margins squeeze out wheat, boost canola acres

The durum planting is the largest in seven years at 5.75 million acres

WINNIPEG /OTTAWA (Reuters) — Canadian farmers planted more canola and less wheat than expected during a harsh spring that included crop-damaging frost and dryness, says Statistics Canada.

It estimated canola plantings at 19.8 million acres, up two percent from its April forecast and exceeding the average trade estimate of 19.5 million. Last year, farmers seeded 20.3 million.

All-wheat plantings were pegged at 24.1 million acres, well below Statistics Canada’s previous estimate of 24.8 million and the trade expectation of 24.6 million.

That was mostly because spring wheat acres were less than expected, likely due to less attractive margins than those for canola and durum.

The report has had little impact on futures prices.

The market is more focused on dry conditions that threaten to reduce crop yields, said analyst Dave Reimann of Cargill Ltd.’s grain marketing services division.

Some canola included in the report may not have survived, he said.

Topsoil moisture in Saskatchewan and Alberta are the poorest for this time of year since 1988, Scotiabank vice-president Patricia Mohr wrote in a report.

It’s likely that 1.5 million acres of canola had to be re-seeded because of frost, said John Duvenaud, analyst at Wild Oats Grain Market Advisory. He said no more than 1.3 million acres were re-planted with canola.

The canola estimate is “probably larger than reality,” he said.

Durum plantings of 5.75 million acres, which is the largest in seven years, exceeded trade expectations and were one million acres more than the previous year.

This year, durum crops are struggling in Tunisia and Europe, Duvenaud said. “The world is going to be happy that Canadian farmers planted this much durum,” he said.

However, the condition of the durum crop is rapidly deteriorating in Saskatchewan, the largest producer of durum on the Praires.

Plantings of oats at 3.4 million acres and barley at 6.5 million were in line with trade expectations.

Statistics Canada surveyed farmers from May 28 through June 11, mostly after widespread frost.

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