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Canada growers make surprise cut to canola sowings

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Canadian farmers are to make a surprise cut to their canola plantings this year, putting more ground to wheat than had been expected, and to soybeans too.

Canadian growers are to plant 19.8m acres (8.0m hectares) with canola this spring, falling for a second successive year, Statistics Canada said, after a survey of 11,500 growers.

The 135,000-acre decline on last year contrasts with a market expectation that the figure would show a rise of nearly 1.2m acres in plantings.

Assuming the yield of 1.85 tonnes per hectare that the AAFC bureau is factoring in for Canadian canola this year, and making some adjustment for crop loss, that gap between the actual figure and the expected 21.1m acres is equivalent to more than 1m tonnes in production terms.

Wheat prospects

Wheat, Canada's biggest crop, is instead to prove more popular with growers this year than had been thought, with StatsCan pegging sowings at 24.77m acres.

While down 1.25m acres year on year, investors had expected a bigger drop in plantings, to 24.4m acres, thanks to lower prices and prospects for returns.

On soybeans, growers are to raise area, by 745,000 acres to 5.26m acres, with peas and lentils too among crops set to see increased seedings.

Market reaction

The data made little impact on wheat markets, with Richard Feltes at RJ O'Brien nothing that StatsCan's sowings report "tends to overestimate wheat area", besides underestimating canola plantings.

In Chicago, wheat for July stood at $6.94 1/4 a bushel in late morning deals, not far from where it had stood ahead of the data, and supported by fresh unrest in Ukraine, a big exporter of the grain.

Spring wheat, which accounts for the majority of the Canadian crop, stood up 1.5% at $7.55 a bushel in Minneapolis.

Nonetheless, the size of the shortfall in the canola sowings number helped November futures in the rapeseed variant extend gains a little in Winnipeg, standing 0.8% higher at Can$448.40 a tonne, pulling out of a steep decline in the run up to the report.

The rebound enabled the contract to regain its 50-day moving average, which it closed below in the last session for the first time in nearly two months.

Seed development

The unexpectedly weak canola sowings figure, reflects largely dynamics in the major growing province of Saskatchewan, where farmers said they were planning a 1.9% drop in sowings of the oilseed to 10.3m acres.

Alberta farmers, the second biggest growers, are planning a 1.6% in seedings, to 6.2m acres.

Meanwhile, the popularity of soybeans comes amid a drive by seed companies to develop varieties suited to the Canadian climate, and which are also used by some Ukraine farmers.

Monsanto is undertaking a $100m, 10-year project to develop earlier-maturing soybean, and corn, varieties suitable for the Prairies.

US Department of Agriculture staff in Ottawa last week quoted a survey showing that "26m acres of western Canada [is] suitable for corn and soybean with advanced seed breeding to develop short maturity varieties".

Farmers this year are expecting to sow a combined 8.6m acres with the two crops.

By Agrimoney.com

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