(Resource News International) — Grain and oilseed production estimates in the latest crop production survey from Statistics Canada for the period ended Sept. 9 held very few surprises, according to industry sources.
“Some of the production estimates were a bit smaller than had been anticipated, and that was the only real surprise,” said Ron Frost of Agri-Trend Marketing Inc. and an analyst with Frost Forecast Consulting of Calgary.
The industry, he said, was expecting that the production estimates in the survey would have been a bit higher in this report given that the survey was conducted before the harvest in Western Canada had gotten underway and before the major frost event occurred.
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“The subsequent StatsCan production surveys were then seen dropping the production estimates,” Frost said.
Keith Ferley, a commodity trader with RBC Dominion Securities, agreed the report contained very few unexpected numbers and indicated that the bigger issue will now be what kind of quality crop will be harvested.
Both Frost and Ferley felt the StatsCan numbers will also be well over-shadowed by the bearish price atmosphere in the U.S. commodity markets.
Statistics Canada pegged 2010-11 canola output in Canada at 10.430 million tonnes, which compares with pre-report expectations that ranged from 10.5 million to 11.3 million. Canadian canola output in 2009-10 was revised up to 12.417 million tonnes from 11.8 million.
Frost and Ferley both said the upward revisions in the old-crop production numbers for canola had been anticipated by the trade, given some of the negative residual numbers for the commodity in previous reports.
“I really believe, however, that the canola production number for 2010-11 will actually be up in future survey updates,” said Mike Jubinville, an analyst with ProFarmer Canada.
No doubt there are issues with yields, and definitely quality, with Canada’s canola crop for 2010-11, but there is also an eerie silence among producers who are surprised that yields in some locations are much better than expected, he said.
“I would not be surprised to see that the canola production number for canola in 2010-11 actually end up closer to 11 million tonnes as a result,” Jubinville said.
Cereals
All wheat production in Canada in 2010-11 was pegged by the government agency at 22.205 million tonnes. This compares with pre-report projections that ranged from 20.60 million to 22 million tonnes. In 2009-10, all wheat output in Canada was 26.848 million tonnes.
Oats output in Canada for 2010-11 was seen at 2.321 million tonnes. This compares with pre-report ideas of two million to 2.4 million tonnes and the 2009-10 level of 2.906 million.
Canada’s barley production in 2010-11 was pegged at 8.259 million tonnes, which compared with pre-report ideas of 8.1 million to 8.5 million. In 2009-10, Canadian barley production was 9.517 million tonnes.
Frost said the key to the wheat, barley and oat production estimates will be quality.
“With the slow growing season and late development, a lot of those crops were subject to the significant frost event after the survey was conducted, which is believed to have reduced the quality of the crop,” he said.
The industry will be mindful of being able to meet the high quality standards of the food and malting sector, he said.
Jubinville agreed oats, wheat and barley will all see a greater proportion of the crop grade lower than what had been originally anticipated.
“The good news for producers is that anyone who was able to harvest a higher quality crop will likely see some better cash prices down the road; however, the bad news is that there will also be a higher proportion of feed-quality grains around, which typically bring in less financial rewards,” Jubinville said.
The flipside of increased feed quality grains is that the livestock sector will have an ample feed supply to work with, he said.
The following are Statistics Canada’s estimates and pre-report ideas for 2010-11 Canadian production, in millions of metric tonnes.
| StatsCan, | StatsCan , | |||
| Trade | September | July | ||
| estimates | 2010-11 | 2010-11 | 2009-10 | |
| Canola | 10.50 – 11.30 | 10.430 | 10.867 | 12.417 |
| All wheat | 20.60 – 22.00 | 22.205 | 22.659 | 26.848 |
| Durum | 2.70 – 2.93 | 3.044 | 3.122 | 5.399 |
| Barley | 8.10 – 8.50 | 8.259 | 8.488 | 9.517 |
| Oats | 2.00 – 2.40 | 2.321 | 2.392 | 2.906 |
| Flaxseed | 0.51 – 0.54 | 0.537 | 0.570 | 0.930 |
