Oats output in Canada down, final tally awaited

(Resource News International) — Excessive moisture in Western Canada definitely had a negative impact on oat acreage and will have severely hurt yield potential, but it will probably take another month or two before the industry gets a real handle on actual damage, according to industry sources.

Canada’s 2010-11 oat output in Agriculture and Agri-Food Canada’s May supply/demand report had been pegged at 3.200 million tonnes, which would have been up from the 2009-10 level of 2.798 million.

Statistics Canada in its March seeding intentions report had pegged 2010 seeded area to oats in Canada at 3.992 million acres compared with 3.731 million in 2009. With the wet conditions across Western Canada, private industry estimates have oats seeded area in Canada now ranging from a low of 2.8 million to around 3.5 million acres.

“Obviously the size of the oats crop at this point will be very difficult to pinpoint,” said John Pauch, the coarse grains analyst with the market analysis division of Agriculture and Agri-Food Canada in Winnipeg.

He acknowledged the wet conditions across Western Canada, particularly in Saskatchewan and parts of Manitoba, have been extremely hard on the crop.

“I think the acreage and production numbers for oats will be down, but the big question is, what are they going down to?” Pauch said.

There will likely be declines in seeded area to oats, there was more than likely a high percentage of abandonment of oats acres, and there was likely some negative impact on yield potential, he said.

“A lot will also depend on what the growing conditions are going to be like during the remainder of the summer as well, as that will play a role in determining the final oat yield potential.”

Mike Jubinville, an analyst with ProFarmer Canada in Winnipeg, agreed damage has been done to Canada’s oats crop due to the excess moisture and production of the crop will be down.

“We know that oat acreage and yield potential has been diminished, but to what extent?” he said. “Has one-quarter of the crop, a third of the crop, or half the crop been hurt?… Those are the questions the industry wants answered, but it will likely still be another month’s wait.”

Both CBOT (Chicago Board of Trade) oat futures and the cash bids for oats in Western Canada have gone up sharply, he said, based on the sudden realization of the crop production problems.

Both the CBOT oat futures and cash bids for oats in western Canada have some additional room to move up as the full measurement of the excess moisture is taken into account, he said.

“Achieving the appropriate oats quality for end-users in the food manufacturing sector may also be a huge challenge, if the growing conditions during the remainder of the season are not realized,” Jubinville said.

He also cautioned that in terms of the acreage estimate, there may have been some long-growing season crops switched to oats, that hadn’t been planned, which ultimately could impact the acreage forecast.

Real Tetrault, CEO of Emerson Milling at Emerson, Man., said end-user demand for new-crop oat supplies in Western Canada has picked up in view of the wet weather situation.

“The end-users had been only buying oats on a hand-to-mouth basis, but that has since changed given the more uncertain oat production outlook in Canada,” he said.

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