Record-large Canadian crops come as no surprise

Upward revisions in Friday’s Statistics Canada production report to all major grain and oilseed crops grown in Canada came as no surprise to industry participants, with even larger crops expected to be confirmed in subsequent reports.

The headline canola and wheat numbers were both up considerably from the August report. Canada’s 2013-14 canola crop is now forecast at a record 15.96 million tonnes by StatsCan, which compares with the previous estimate of 14.74 million and the year-ago level of 13.87 million. Average trade guesses had topped 16.5 million.

All wheat was forecast at a record 33.03 million tonnes by StatsCan, which was in line with trade guesses, but well above the 30.56 million forecast in the previous report and the 27.01 million tonnes grown in 2012.

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Of that total, durum was pegged at 5.58 million, which compares with the year-ago level of 4.63 million and an earlier estimate of 5.12 million.

“There’s nothing bullish to take out of these numbers, but it’s not overwhelmingly bearish either, as the expectations were there,” said Mike Jubinville of ProFarmer Canada in Winnipeg.

“Everyone had the expectation that the production numbers were rising, and that sentiment is not done yet as ‘Big crops tend to get bigger,'” he said, noting even larger production is likely in the final report out in December.

Wayne Palmer, senior analyst with Agri-Trend Marketing in Winnipeg, said farmers typically underestimate the size of their crops in the StatsCan reports. He agreed the December report would show even larger production, as most growers were seeing historically high yields on all of their crops this year.

However, the bigger production may not necessarily be bearish for prices, said Palmer, adding big crops tend to have an easier time being absorbed by the market.

Canadian barley production was estimated at 9.25 million tonnes by StatsCan, up from the previous estimate of 8.81 million tonnes and the year-ago level of 8.01 million. Oats were forecast at 3.16 million, which compares with 2.81 million in 2012.

Pulse crops were also revised higher from previous estimates, with the Canadian pea crop now forecast at 3.78 million tonnes and lentils at 1.71 million, which compares with peas at 3.34 million a year ago and lentils at 1.54 million.

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

Table: Summary of Statistics Canada crop production estimates for 2013-14. Trade’s pre-report estimates included for comparison. Production in millions of tonnes. Source: Statistics Canada.

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