Canadian farmers have cut ambitions for spring wheat plantings, in favour of the likes of barley and oats, and reflecting movements in crop prices, official data showed
Canadian spring wheat seedings this year, now largely over, look like ending up at 18.77m acres, the highest in six years, Statistics Canada revealed, after a survey between mid-May and mid-June.
While up 1.46m acres year on year, planting at that level would be below the 19.39m-acre figure that a StatsCan survey in March showed.
And, with durum sowings falling 1.29m acres to a five-year low of 4.89m acres, all-wheat plantings (including winter crop) of 24.60m acres came in well below the figure of 25.7m acres that investors had expected.
The downgrade reflected reduced acreage expectations for all three of the key Prairies producing states, Alberta, Manitoba and Saskatchewan, the briefing showed.
‘Limited access to China’
For canola too, farmers reduced their planting ambitions, although by a more modest 362,000 acres to 20.95m acres.
While down nearly 1.9m acres year on year, that figure remained a little above the 20.7m-acre number investors had expected, in the face of a trade spat with China which has dented Canadian canola exports to what is usually by far their biggest market.
“While the seeded area in 2019 was the lowest since 2016, it still represented the fourth highest canola area on record,” StatsCan said.
The bureau added that “the decrease in canola seeded area was likely influenced by lower prices compared with the previous year”, with lower values reflecting “limited access to Chinese export markets as well as high global supply of oilseeds”.
‘Low supplies, higher prices’
The price of the new crop November canola futures contract was actually 1.9% lower as of June 11, when StatsCan’s latest farmer survey ended, than at the close of the March poll.
By contrast, Minneapolis spring wheat futures for September were up 2.7% over the same timescale.
Still, Chicago oat futures for September gained 12.6% over this period, a factor which officials attributed for an increasing showing in farmers’ spring sowings plans, with the latest survey showing area at a 10-year high of 3.69m acres – 400,000 acres more than pencilled in in March.
“Low supplies have resulted in higher prices, which may have producers opting to plant a larger area compared with a year earlier,” when seedings totalled 3.05m acres, StatsCan said.
It added that “the increase in oat area was concentrated primarily in Saskatchewan,” where seedings were up 390,900 acres year on year.
‘Barley instead of canola’
For barley too, values seem to have played a role in boosting the crop’s appeal to growers, who reported sowings of 7.40m acres, a seven-year high, and 247,000 acres above March expectations.
Noting “higher prices resulting from low global stocks and the higher anticipated need for livestock feed”, the bureau said that “higher barley prices may also have influenced some farmers to plant barley instead of canola, given ongoing trade issues”.