Poor yields dent Canadian farmers' love for canola

Canadian farmers' love affair with canola has cooled, with sowings of the oilseed set to drop for the first time in more than a decade this year, clearing space for one of the country's biggest ever wheat crops.

Canadian canola plantings are to drop this year by more than 100,000 hectares, ending a long run of increases, data from the Agriculture and AgriFood Canada (AAFC) farm ministry showed.

The forecast reflected ideas that a poor harvest last year, when problems such as hot temperatures, moisture stress, high winds and diseases such as aster yellows, blackleg and sclerotinia were blamed for a 19% slump in the national yield to 1.55 tonnes per hectare.

AAFC flagged "disease and insect concerns and perceived high input costs", besides "attractive returns for alternative" crops as reasons prompting farmers to reconsider their affections for the rapeseed variant, which has proved a strong earner, helped by demand from China for oilseeds, and by biodiesel use.

Strong harvests

Canada's production of the oilseed nonetheless looks set to rebound by 13%, to a record 15.5m tonnes, reflecting an assumption of better yields.

AAFC forecasts, Canada crop sowings 2013-14 and (year-on-year change)

All wheat: 10.25m hectares, (+6.2%)

Canola: 8.60m hectares, (-1.3%)

Barley: 3.15m hectares, (+10.5%)

Soybeans: 1.94m hectares, (+15.5%)

Corn: 1.40m hectares, (-2.4%)

Dry peas: 1.35m hectares, (+2.6%)

And Canadian farmers could be on for a bumper crop too of wheat, of which sowings are seen rising 7% to 10.25m hectares, boosted by a switch from canola, lentils and oats, AAAFC said, estimating the harvest at 28.5m tonnes.Production at that level would come in only slightly behind the 28.6m tonnes reached in 2008, the biggest crop since the 1990s.

AAFC highlighted potential "good prices" for the grain expected for non-durum wheat to average Can$250-285 a tonne, as measured by prices for a Canadian Wheat Board wheat pool, historically high, if down on the Can$283-315 a tonne forecast for last year's crop, and the Can$292 a tonne achieved in 2011-12.

World prospects

The extra production will nudge Canada's wheat exports 250,000 tonnes higher to 18.8m tonnes, AAFC said, cautioning that rivalry with other shippers will prevent a bigger increase.

"Exports are forecast to increase slightly as growing demand in the world food market is partly offset by more competition in export markets due to increased world supply."

Indeed, the ministry forecast a 31m-tonne rise to 685m tonnes in world wheat production in 2013-14, "due mostly to a higher seeded area and a recovery in production for Russia, Ukraine and Kazakhstan", where dryness dented output last year.

The US harvest was seen bucking the trend, after the poor start to the winter crop, as highlighted in data on crops in Kansas and Oklahoma, and forecast falling 3m tonnes to 59m tonnes.

"The average farm price is forecast to decrease from $7.90 a bushel to $7.10 a bushel because of the higher world supply and higher US carry-out stocks."

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