WINNIPEG, Manitoba, Sept 14 - A drought has damaged Canada's canola and wheat harvests even more than it appeared weeks ago, according to a Statistics Canada report.
Record-hot summer temperatures in Canada's western crop belt, combined with sparse rain, sharply reduced farm yields of the world's biggest canola-growing nation. Canada is also a major wheat exporter.
ICE Canada November canola futures spiked after the report, climbing as much as 4.4 percent.
Statistics Canada, using satellite imagery, estimated canola production at 12.8 million tonnes, about 2 million tonnes less than its Aug. 30 estimate and down 34 percent from last year.
The canola crop, crushed mainly for its vegetable oil, is the smallest in 13 years, StatsCan said, and even smaller than the industry expected.
"Canola supply is incredibly tight," said Neil Townsend, chief market analyst for FarmLink Marketing Solutions. "It leaves incredibly small amounts for export."
StatsCan also cut its estimate for production of spring wheat, which Canada exports to the United States, Japan and elsewhere for milling into baking flour. The agency estimated spring wheat output at 15.3 million tonnes, down 41 percent year over year and lower than StatsCan's previous estimate of 16.1 million.
It is Canada's smallest spring wheat crop since 2007.
Canada's all-wheat harvest, which also includes durum and winter wheat, looks to be 21.7 million tonnes, down from StatsCan's previous estimate of 22.9 million.
StatsCan's report used satellite imagery to Aug. 31, one month later than its previous report. Crop weather improved midway through August, but it was too late for developing crops, Townsend said.