The western barley and feed wheat contracts on the Winnipeg Commodity Exchange saw their largest gains in a long time Oct. 5 after Statistics Canada lowered its forecast of the barley crop.
The agency pegged barley production at 10.01 million tonnes, down 2.7 percent from the July estimate and almost 20 percent less than last year.
The drop was a surprise because wheat, durum, oat and canola production forecasts increased from the July 31 outlook.
Feed grains prices were already rising on the belief that feed grain supplies would be much tighter than last year. In recent years, bad weather caused large feed wheat production, but this year a quality wheat crop was harvested, reducing the feed wheat supply.
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Corn prices have risen on expectations that booming demand from ethanol plants and strong exports will use up all of the record-large American corn crop.
As well, American barley and oats crops this year are smaller than last year. In fact, U.S. oat production hit a record low of 1.45 million tonnes, down 18 percent from last year.
The lentil number was another stand out in the Statistics Canada report. It forecast production at 673,000 tonnes, down from 784,000 tonnes in the July 31 outlook and about half of last year’s production of 1.264 million. This should significantly reduce year-end stocks and support prices.
Pea production is down 11 percent from last year despite a four percent increase in seeded area. Last year’s excellent yield in Saskatchewan was not repeated because hot weather in July reduced flowering. However, problems there were partly offset by much improved yields in Manitoba, which Statistics Canada estimated to be 42 bushels per acre compared to just shy of 22 bu. last year.
