Analysts I spoke to a couple of weeks ago for a story about today’s Statistics Canada seeding intentions report told me 1) canola acreage wouldn’t go up as much as you might expect; and 2) wheat would be unloved but still planted.
Looking at today’s report, they were right. Canola acreage is up 4.4 percent. Spring wheat is surging in acreage by 7.1 percent. Durum is slumping by 35 percent. All of this is based on late-March opinions of farmers when StatsCan surveyed them.
The main reason for the weak canola increase is that farmers have been pushing canola rotations for years, anyway, and the drought and clubroot problems are stopping farmers going canola crazy. And with wheat, well, it sucks to grow a crop you expect to lose money with, but you’ve got to have that cereal grain in your rotation. You can shift out of durum, but you can’t go too far from having some cereal there.
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Oats acreage is up eight percent, but that’s not alarming. In fact, its on the lower end of what analysts had been predicting. A train wreck had been worrying folks in the mid-winter, when farmers said they might crank oats acreage up by more than 20 percent because of happy price outlooks, but since then prices have slumped and oats expectations are no longer on steroids.
It’s going to take lots of demand to eat up all that wheat and canola, but for canola, at least, it seems to be there. New crushers and Chinese who can’t stop buying – even with many ports closed – should help drag that crop out of farmers’ bins and into the commercial system. Wheat is no fun, but hard red spring wheat looks the best, which is why American great plains farmers also seem to be shifting into increased production of spring wheat. Gotta grow it, pick the least bad one.