(Resource News International) — The updated grain and oilseed production survey from Statistics Canada, scheduled to be released Friday (Oct. 2), is expected to show a general increase in the size of all crops, according to market participants.
However, the market participants wondered aloud, will the government agency’s survey results include the full brunt of the crop size increase or will it take until the December production report for it to be realized?
“Almost the entire grain and oilseed industry is expecting to see higher production estimates right across the board,” said Mike Jubinville, an analyst with ProFarmer Canada in Winnipeg.
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“But because the survey was done in early September, it is unlikely to have taken into account the benefit of the warm temperatures and the positive impact on yields for all the crops seen during the whole month.”
A very small percentage of Canada’s grain and oilseed crop is believed to have been harvested when the data was collected by the government agency, said Ken Ball, a broker with Union Securities in Winnipeg.
As a result, Ball said, the full increase of the estimated production will not be felt until the agency releases its December report.
“What is interesting, is that the grain industry is trying to put a final number on what production ultimately will be, while the government’s survey results will not reflect what output is really going to be, as it will take until the December report before the final numbers will be in place,” Jubinville said.
“The expectation is not what the StatsCan numbers will be, but what ultimately the number will be… and because of that, there will be a gap in the actual production estimates.”
“Slow start”
One of the production numbers that will draw very close attention will be canola. Statistics Canada pegged 2009-10 canola output in its August survey at 9.541 million tonnes. Canola production estimates by various industry sources currently range from 10 million to 11.5 million tonnes. During the 2008-09 season, Canada harvested a record 12.642 million-tonne canola crop.
Joanne Buth, president of the Canola Council of Canada, believes canola production during 2009-10 will exceed 11 million tonnes.
“The cool spring and summer meant canola crops got off to a slow start, but the warm temperatures in September allowed the crop to mature before the first hard frost,” she said in an interview.
Ball said Friday’s StatsCan survey was unlikely to show a canola crop any bigger than 10 million to 10.5 million tonnes.
“Had the survey been taken a bit later, the numbers would have easily been in the 10.5 million- to 11 million-tonne level,” he said.
Ball was confident the final canola production estimate would topple 11 million tonnes.
“There are producers who had not planned on even starting their combines this fall as they had pretty well written canola off in July,” Ball said. “Those same producers are now harvesting a canola crop that is yielding on average about 60 bushels to the acre.”
Gerry Klassen, a grain market analyst and private trader, said the cool temperatures and wet conditions during the critical flowering stage benefited the yield potential of the crop, with the warm temperatures and dryness during September the key to the maturation of the crop.
All-wheat production in Canada was also expected to be significantly higher than the 23.614 million tonnes in the August survey from StatsCan. Pre-report estimates for all wheat in 2009-10 ranged from 25 million tonnes to as high as 27 million, although most projections were around the 26 million- to 26.5 million-tonne level. All wheat output in Canada during 2008-09 totalled 28.611 million tonnes.
“There are some pretty extraordinary yield estimates coming in for Canada’s spring wheat crop,” Ball said, noting it was unlikely the StatsCan survey would even show a quarter of the anticipated jump in the all-wheat production estimate in Friday’s update.
Above expectations
Oats output in Canada in August was estimated by StatsCan at 2.967 million tonnes. Pre-report projections range from three million to 3.3 million tonnes. Production of oats in Canada during 2008-09 totalled 4.272 million tonnes.
“Oats output in Canada will at least be 200,000 to 300,000 tonnes above what the August forecast was,” Jubinville said, explaining that yield averages for the crop were surpassing early indications.
Ball concurred, noting that reports from producers in both Manitoba and Saskatchewan suggest the yield for oats was well above expectations.
Barley production in Canada in the August forecast from StatsCan was 8.948 million tonnes, with output in 2008-09 totalling 11.781 million. Pre-report estimates for barley ranged from 9.5 million to 9.7 million tonnes.
“I would be quite surprised if they don’t have an increase in wheat and barley,” said Stuart McMillan, with the Canadian Wheat Board’s weather surveillance department. “Most people in the trade have said that all reports are showing that we’ve had some very good yields here.”
Flaxseed production in August totalled 915,000 tonns, but most market participants were expecting output to be in the one million- to 1.1 million-tonne range. Flaxseed output during 2008/09 totalled 861,100 tonnes.
Pea output in Canada in August was forecast by StatsCan at 3.113 million tonnes. Most pre-report estimates called for output to be up around the 3.5 million-tonne level. Pea production in Canada during 2008-09 totalled 3.571 million tonnes.
