MarketsFarm — Mindful of the summer drought conditions that seriously cut into crop production across the Prairies, average trade estimates call for downward revisions to Statistics Canada’s already-small forecasts for most crops when the it releases its first survey-based estimates of the marketing year on Friday.
While prior reports, in September and August, were compiled using satellite imagery, the December report will be the first of the year to use farmer surveys.
While StatsCan has made greater use of satellite imagery and model-based estimates in recent years, the technology is still relatively new and the likelihood of discrepancies between the two styles of report could lead to some surprises in the Dec. 3 estimates, according to market watchers.
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“There a high level of uncertainty,” Ken Ball of PI Financial in Winnipeg said, adding “there’s the potential here for some surprises to pop up.”
The previous satellite reports likely didn’t fully account for the drought, analyst Mike Jubinville of MarketsFarm Pro added, pointing to factors such as pod filling, field abandonment, or how much was cut for greenfeed.
“I suspect, if anything, it will be lower numbers,” said Jubinville, adding that the extent of the downgrade remains to be seen especially given anecdotal reports from some farmers of better-than-expected spring wheat yields.
“Yields might be a little higher for some crops, but overall production will be down because they’ll have a higher abandonment rate,” commodity analyst and Winnipeg-based trader Jerry Klassen said.
While the general consensus is for smaller production relative to the September report, Ball said some of the grains may end up a bit better than earlier thoughts.
“The canola number might (be down from earlier estimates) but the wheat number could come in a little bit higher,” he said, noting August rains were possibly beneficial for many of the grain crops.
On a crop-by-crop basis, most market participants expect canola production to be revised down from the 12.8 million tonnes forecast in September, with estimates ranging from 11.5 million to 13 million tonnes. That would compare with the 19.5 million tonnes grown in 2020-21.
Estimates for total wheat production, including durum, are forecast at 19.3 million to 22 million tonnes. That would compare with the 35.2 million tonnes grown the previous year.
Table: Pre-report trade estimates in millions of metric tonnes, with comparison to September and year-ago estimates.
| Pre-report trade. . | September | ||
| estimates | 2021-22 | 2020-21 | |
| Durum | 3.200 – 3.700 | 3.545 | 6.570 |
| All wheat | 19.300 – 22.000 | 21.715 | 35.183 |
| Oats | 2.300 – 2.600 | 2.579 | 4.576 |
| Barley | 6.300 – 7.400 | 7.141 | 10.741 |
| Canola | 11.500 – 13.000 | 12.782 | 19.485 |
| Flaxseed. . | 0.330 – 0.380 | 0.379 | 0.580 |
| Peas | 2.400 – 2.600 | 2.527 | 4.594 |
| Lentils | 1.600 – 1.900 | 1.802 | 2.868 |
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