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Canadian canola, wheat crops to fall further than had been thought

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Canada’s canola and wheat crops will shrink further than had been expected, depressed by declines in area and in yields, despite a boost from “timely rain” in parts of the Prairies.

 

Statistics Canada, following a survey of more than 13,000 growers undertaken from July 4 to August 5, pegged Canada’s wheat harvest this year at 31.25m tonnes – a drop of nearly 1m tonnes year on year, and defying market expectations of a small increase in production.

 

Statistics Canada - whose estimate came in 1.2m growers shy of the forecast from AAFC, Canada’s farm ministry – highlighted that “timely rain beginning in late June and early July helped to increase crop health in several parts of Western Canada” after a dry start to the growing season.

 

“Overall plant growth improved in many parts of Western Canada throughout July as survey collection progressed.”

 

‘Wheat production to decline’

Nonetheless, StatsCan forecast wheat yields showing a small decline this year, to 47.5 bushels per acre, rather than the modest increase that investors had expected, backing ideas of a lower harvested area too.

 

In Saskatchewan, the top wheat-growing province, “producers expect wheat production to decline 3.9% year over year to 14.1m tonnes, driven by lower anticipated yields”, seen falling by 3.3% year on year.

 

This decline offset expectations of raised harvests in Alberta and Manitoba, the other two Prairies growing states.

 

‘Ongoing trade issues’

For canola, StatsCan pegged the Canadian harvest at 18.45m tonnes – a drop of 1.89m tonnes from last year, and indeed the lowest result since 2015.

 

The figure was also some 450,000 tonnes below market expectations, and a little below AAFC expectations too.

 

Again, StatsCan flagged the prospect of a slight fall in yields, particularly in Saskatchewan, after the dry start to the year, but underlined too the dent to sowings from worries over Canada’s diplomatic spat with China, which has sunk Canada’s canola exports to top customer China.

 

Officials noted “a decline in seeded area following the ongoing trade issues surrounding the limited access to Chinese export markets”.

 

The row stems from Canada’s arrest, at the behest of the US, of Meng Wanzhou, the Huawei chief financial officer.

 

‘Cold and wet’

StatsCan’s figure for Canadian corn production this year - down 279,000 tonnes on 2018 at 13.61m tonnes - also fell short of the expectations of investors who had expected a small increase in output year on year.

 

“Both area and yields were likely affected by highly variable weather,” the agency said in its report, noting that in eastern Canada, which includes top corn-growing province Ontario “cold and wet conditions caused some farmers to delay planting”.

 

However, growers are expected to harvest more oats than had been thought, with output expected at 3.95m tonnes, an 11-year high, “a result of greater harvested area”.

 

For barley, the expected harvest of 9.64m tonnes, a six-year high, was also seen boosted by increased area.

 

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