Everyone is trying to guess how much of a crop prairie farmers have in their bins.
For commodity brokers, end users and farmers, knowing the size of the crop allows them a better sense of a fair price for each grain and oilseed.
For others, such as grain companies, knowing the size of the various prairie crops allows them to plan how to best use their facilities to move the crop to market.
For government departments, forecasting the size of the crop is a key element of their service to society.
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Everyone takes it seriously, but as intently as they all examine it, they often don’t come up with the same numbers. That’s the case now.
On Oct. 3, Statistics Canada released a production report that showed a prairie crop smaller than most people in the grain trade expected. Most prairie crops will be bigger than the federal agency expected earlier in the growing season, but not by as much as commodity traders expected.
“We’re still expecting the crop to be only five to 10 percent below average,” said Blair Rutter of Agricore United. The government report foresees a smaller crop than that.
Commodity market analyst Ken Ball of Benson Quinn GMS said he, too, thought Statistics Canada’s expectation was a bit low.
“We were expecting it to be a little bigger than that,” said Ball.
But Terry Bedard, an economist with Saskatchewan Agriculture, thought the opposite.
“I wouldn’t say that they’re short. It’s pretty close to bang on or even a little overstated,” said Bedard.
“I think we’re going to see the flax and the canola yield come down somewhat when it comes to the final report.”
Analysts have been trying to get a sense of the size of the prairie harvest by balancing late summer reports of bountiful crops and good yields, with later reports of weather problems and continuing insect damage.
Ball said most traders expected Statistics Canada to find a canola crop of 6.5-6.6 million tonnes, but instead it found only 6.3 million tonnes.
It increased Canada’s all-wheat production by about one million tonnes from its earlier estimate, but traders had expected a two million tonne bump-up.
The biggest surprise for many analysts was the estimate of a smaller oats crop.
“Stats Can’s lower than expected production estimate released Friday caught the market by surprise,” Randy Strychar of Statcom Ltd. said in a market commentary.
The agency’s report was based on telephone interviews with more than 17,000 farmers between Sept. 4-15.
The survey is the most comprehensive done in Canada, but analysts say they will have to wait for the agency’s final report to get a firm idea of the size of the crop.
