Canadian canola production in the 2012-13 crop year was smaller than most industry participants had been anticipating and will result in an "astoundingly" tight ending stocks situation, industry officials said in reaction to Statistics Canada’s production survey released Wednesday.
Many thought the government agency would raise its canola production forecast from the October estimate, "but that just did not happen," said Ken Ball, a broker with PI Financial Group in Winnipeg.
The slight downward revision to the canola production projection from the October report was not expected to significantly alter the market’s current supply/demand characteristics in any shape or form, said Mike Jubinville, an analyst with ProFarmer Canada in Winnipeg.
Demand for canola from the export and domestic sectors "will guarantee that year-end stocks will be tight," he said.
Statistics Canada in its production update pegged 2012-13 Canadian canola output at 13.309 million tonnes. Pre-report expectations had anticipated production to fall between 13 million and 14.4 million tonnes, with most of the projections falling at the high end of the range. In October, canola output in Canada was pegged at 13.359 million tonnes while in 2011-12 production came in at a record 14.608 million.
"There may still be some question about the impact of wind damage to crops that occurred during the harvest period, but overall there is no question canola supplies will remain extremely tight," said Keith Ferley of RBC Dominion Securities.
The estimates for barley and oats were also viewed as being on the tighter side.
StatsCan estimated 2012-13 Canadian barley production at 8.012 million tonnes. Pre-report ideas had ranged from 8.5 million to 8.9 million tonnes. In October, the government agency pegged output at 8.59 million tonnes while in 2011-12 production was 7.891 million.
"This was the third year in a row in which barley output in Canada has been on the low end of the scale, meaning that stocks of the commodity continue to be tight," Ball said. "It’s a good thing the livestock industry is not exactly thriving at the moment and demand has been light."
Jubinville noted the barley supply/demand balance will tighten even further with the much lower than expected projection, making barley the bullish surprise of this report.
Canadian oat production in 2012/13 was forecast at 2.683 million tonnes. Pre-report projections had ranged from 2.875 million to 3.12 million. In October oats output in Canada came in at 2.938 million tonnes while totalling 3.157 million a year ago.
The oat projection was definitely at the low end of expectations and was seen providing those values with a much needed lift, Jubinville said.
All wheat production in Canada was pegged at 27.205 million tonnes, which compares to pre-report trade estimates ranging from 26.5 million to 27.4 million. In October, StatCan pegged 2012 all-wheat production at 26.733 million tonnes, which compares with the 2011 crop of 25.261 million.
"While the all-wheat forecast is a bit higher than anticipated, I don’t think it will be enough to enlarge the world wheat supply by very much," Ferley said.
— Dwayne Klassen writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.
Table: Statistics Canada’s November estimate of 2012-13 production of principal field crops, released Dec. 5, 2012. Production in thousands of metric tonnes, yield in kilograms per hectare, area harvested in thousands of hectares.
|Beans, dry white||50.6||2,300||115.6||51.0||46.1|
|Corn for grain||1,417.9||9,200||13,060.1||11,575.8||11,358.7|