Canadian wheat harvest to hit 22-year high

Canada will record its best wheat harvest in 22 years, and its biggest canola production on record – albeit a result well below market expectations.

Statistics Canada, in its first output forecasts for the domestic 2013 harvest, pegged wheat production at 30.56m tonnes, a rise of 12.9% year on year, and the highest figure since 1991.

The estimate - which was above a Canadian farm ministry forecast of 29.2m tonnes and industry expectations of a 30.4m-tonne figure –reflected "combined gains in harvested area and in average yield".

StatsCan forecast a 3.3% rise in average yields - to 44.0 bushels per acre, equivalent to 2.96 tonnes per hectare – rather than the small decline to 2.84 tonnes per hectare forecast by the farm ministry (AAFC).

Benign weather, and good crop production, had already boosted market expectations for Canada's wheat harvest, as reported on Friday.

Record harvest

StatsCan's estimate for the harvest of canola - the rapeseed variant of which Canada is the top producer - was higher than the farm ministry's too, at 14.74m tonnes, and ahead of the record 14.61m tonnes set two years ago.

"Farmers in all three Prairie provinces" – Alberta, Manitoba and Saskatchewan, the main crop producing areas – "anticipate an increase in canola production, despite lower harvested areas," StatsCan said.

Indeed, the national canola yield is expected to jump 22% to 33.7 bushels per acre from last year's figure, which was depressed by disease and poor weather after swathing which meant much seed was lost.

Nonetheless, the harvest forecast was well below the 15.5m tonnes expected by investors.

Expectations had been underpinned by an upgrade last week by the US Department of Agriculture to 15.3m tonnes in its forecast for the crop.

The USDA noted that vegetation index data drawn from satellite pictures "show above-average crop vigour, and higher than 2009 when record yields were achieved".

Market impact

The immediate market impact was to lift canola futures for November to Can$376.25 a tonne in Winnipeg, a gain of 1.0% on the day.

In Paris, rapeseed futures for November stood up 1.1% at E376.50 a tonne.

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