Few were surprised by the Statistics Canada crop production report
released Oct. 4, but many are still unsure about the state and size of
the 2002 prairie cereal and oilseed crop.
Market analysts say no one knows how much of the harvested crop is good
enough to make the top grade.
“The yields may be there, but the quality maybe isn’t,” said Tony
Tryhuk of RBC Investments.
World markets were little affected by the release of the agency’s
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September estimate of production. Oats prices in Chicago rose slightly
and canola prices fell slightly.
Tryhuk said the main news in the report was higher yields of some crops
in Manitoba and that was no surprise.
“As we went through the harvest period we got pretty regularly updated
reports from our commercial clients, who had pretty good information
from the country,” said Tryhuk.
“The numbers came in as the trade predicted.”
Errol Anderson of Pro Market Communications said the trade already has
a good sense of the size of the crop and is now focused on the level of
world demand for Canadian crops.
“Supply news is now old news,” he said.
Nolita Clyde of Statcom Ltd. said the markets are looking elsewhere for
momentum now that the small Canadian harvest has been confirmed.
“Much of our price direction may now depend on what happens in the U.S.
market,” she said.
An expected increase in world vegetable oil prices in the next few
months would take canola with it, Clyde said. Small changes in Canadian
canola supply, such as StatsCan bumping up canola to 3.23 million
tonnes from 3.22 million in the July report make little difference.
Statcom oats analyst Randy Strychar said the federal agency’s changes
weren’t significant and the trade is fixated on the oats quality
problem.
“The problem all along has been the quality,” Strychar said.
“We were expecting (the report to show) 100,000 tonnes either way. It
really didn’t matter. The question is, do we have the quality?”
Canadian Wheat Board market analyst Dwayne Lee said the small, 100,000
tonne increase in the report’s expectations for spring wheat had little
effect on world markets.
The survey was completed during harvest, before some of the weather
damage to prairie crops occurred, so the true state of the crop is not
yet revealed.
Lee said StatCan’s December report will offer a clearer picture.
