Year-ago Canadian canola crop revised higher

CNS Canada — Canada’s 2016 canola crop has been revised higher in Statistics Canada’s first production estimates for 2017, released Thursday.

StatsCan raised the 2016-17 production number from 18.4 million tonnes to 19.6 million, and pegged the 2017 crop at 18.2 million tonnes, which was somewhere in the middle of trade estimates.

“I think there’s a sentiment that that number will grow with subsequent reports over time,” said Mike Jubinville of ProFarmer Canada in Winnipeg. “Just as it did with the 2016 crop.”

After an initial drop when the report was released, canola futures rose, suggesting traders found the 2017 estimates supportive.

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“Some areas improved, so I think the market is taking it as a supportive number, feeling ending stocks will tighten going forward,” said Keith Ferley of RBC Dominion Securities in Winnipeg.

Jubinville viewed Thursday’s report as mostly neutral.

“I don’t really see this as any type of game-changer number. Anything below 19 million tonnes suggests declining carryout expectations,” he said. “Supplies will have to be rationed until that production number gets adjusted higher.”

Perhaps the most drastic change on the report was for durum.

Pre-report ideas pegged the 2017 crop at 4.5 million to 5.3 million tonnes, but Statistics Canada estimated the crop at 3.9 million, down from last year’s crop of 7.8 million.

“This report shows that crops in southern Alberta and southern Saskatchewan really took a hit on yields,” said Jerry Klassen, manager of Canadian operations with Swiss-based GAP SA Grains and Products in Winnipeg, adding the report was definitely bullish.

Statistics Canada pegged all-wheat production at 25.5 million tonnes, compared to trade estimates of 22.8 million to 27.8 million. Last year the crop came in at 31.7 million tonnes.

Ferley thought that estimate was a bit surprising. “The spring wheat number was a negative surprise, with Minneapolis (Grain Exchange) down double digits,” he said.

For lentils, the number was 2.3 million tonnes, compared to last year’s crop of 3.2 million. “Lentils were a bit lower than anticipated,” said Klassen.

— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow CNS Canada at @CNSCanada on Twitter.

Table: A quick summary of Statistics Canada’s crop production estimates for 2017-18, including pre-report estimates for comparison, in millions of metric tonnes.

AugustPre-report
2017-18.     .ideas2016-17
Durum3.8984.500 – 5.3007.762
All wheat.     .25.54122.800 – 27.800.    .31.729
Oats3.6853.100 – 3.6003.195
Barley7.2126.700 – 7.7508.784
Flaxseed0.5070.500 – 0.6250.588
Canola18.20317.000 – 19.50019.601
Peas3.7933.400 – 4.0004.836
Lentils2.2911.900 – 2.8003.248

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