Canada’s farm ministry cautioned over the threat posed by dryness to Prairies crops as it reduced expectations for stocks wheat, for which it nudged higher price expectations too.
AAFC slashed by 1.40m tonnes, to 5.10m tonnes, its forecast for Canadian wheat inventories at the close of 2019-20, as starts next month in the country.
The revision – which put a 100,000-tonne decrease in inventories on the cards next season, compared with the 1.30m-tonne stockbuild previously expected – was reflected in increases of Can$5 a tonne to Can$225-255 a tonne in the forecast for non-durum wheat prices in 2019-20.
For durum, the forecast for values, as measured by average Saskatchewan producer spot prices, was also raised by Can$5 a tonne, to Can$236-265 a tonne, with AAFC foreseeing a small rise year on year “due to lower world, Canadian and US supply and stronger export demand”.
‘Soil moisture remains deficient’
For canola, Canadian farmers second most popular crop, the end-2019-20 stocks forecast was cut too, by 325,000 tonnes to 3.98m tonnes.
The revision, as for wheat, reflected in the main results of a Statistics Canada survey released last month which signalled that growers planted less area with both crops than had been suggested by a previous farmer poll.
However, AAFC, which also trimmed its forecast for this year’s average wheat yield, flagged too a dearth of rainfall in the which, while having speeded sowings in the key Prairies growing area, now threatened to undermine productivity.
For both barley and oats, the ministry said that “sufficient and steady rainfall is required to improve soil moisture, promote crop growth, and maintain average yield”.
For canola, AAFC said that “soil moisture remains deficient across large parts of Manitoba and southern Alberta.
“Yields will be more dependent than usual on rains during the months of July and early to mid-August,” the ministry said, adding that while it was “still assuming trend yields”, any revisions to the estimate were “likely to be downwards”.
The comments follow a briefing from officials in Saskatchewan, Canada’s top grain-growing province, last week which said that “the majority” of its crops “are in poor-to-good condition”.
The proportion of canola rated in “good” or “excellent” condition was, at 42%, the lowest for the time of year in more than a decade, although the reading for spring wheat was a more typical 63%.
However, the Prairies were forecast to receive some rains over the weekend, although with weather service Maxar cautioning that “some spotty dryness will linger in southern Alberta”.
‘Strong row crop prices’
For barley, AAFC trimmed its forecast for prices in the benchmark Lethbridge, Alberta market in 2019-20 by Can$10 a tonne to Can$240-270 a tonne, reflecting the increased seedings estimate unveiled in last month’s Statistics Canada report.
“The average price of feed barley in Lethbridge feedlots for 2019-20 is projected to decrease slightly from 2018-19 due to higher supply expected for 2019-20,” the ministry said, raising its forecast for carryout stocks next season by 50,000 tonnes to 150m tonnes.
“Supportive factors include rising US corn prices expected for 2019-20 and concerns about production prospects for new barley and hay crops, as well as worries about pasture development across the Prairie provinces.”
For oats, the forecast for prices - as measured by spot Chicago futures, translated into Canadian dollars - was also reduced by Can$10 a tonne, to Can$250-280 a tonne.
“[The] Canadian oat price for 2019-20 is projected to increase from 2018-19 on strong row crop prices and concerns about 2019 output prospects in North America.”