LANIGAN, Sask. – Canola acres and yields may be lower than expected due to high variability in the prairie crop, but prices haven’t reflected the potential shortfall.
“We’re down $3.50 this morning. It isn’t a busy market right now,” Lawrence Yakielashek, general manager and vice-president of trader and seller Alfred C. Toepfer Canada in Winnipeg, said Aug. 14.
“The buyers and sellers want to see the proof in the bin before anybody gets excited and establishes a new position in the market.”
Tracy Glessing of Northeast Terminal in Wadena, Sask., believes the market may not have taken into account the realities in the field and may not do so until the harvest is in the bin.
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So producers may not see a rally before the end of October.
“Lots of farmers need to pay those seeding bills by the end of October and may not get to participate in a better market because canola prices aren’t more responsive than they are,” he said.
Glessing, like many in the industry, is waiting for the Aug. 25 Statistics Canada production report to get a better sense of what is coming for the new crop.
His company is located in what is traditionally a high production canola area.
“We’re not seeing the crops we generally do. Within a 40 or 50 mile radius, producers do get the 40 and 45 bushel canola here when the weather is right,” he said.
“In July it looked like 25 bu. (per acre). Right now we’re getting producers telling us it’s more like 15.”
Kevin Blair of Blair’s Fertilizer in Lanigan, Sask., said farmers and industry players from Alberta to Manitoba are telling him that the crop isn’t as large as Statistics Canada
estimated.
In its June 22 release, the agency said producers reported planting 13.3 million acres of canola. That was nearly as much as in 2005. Blair believes the estimate was off and sent the wrong message to markets.
“Now some are saying 11.5 million is closer to the mark. If that’s true, then production numbers will be a lot lower and that should help prices,” he said.
Blair said the estimate accuracy would improve if Statistics Canada did production tours similar to American corn tours held by the United States Department of Agriculture.
Rob Teffaine of Associated Proteins in Ste. Agathe, Man., said the carryout stocks of 2005 are keeping a lid on any current price optimism.
“(In southeastern) Manitoba the crops are looking like they’ll provide average yields,” he said.
