CNS Canada — Statistics Canada’s latest crop production estimates are in and while they may raise a few eyebrows, the numbers aren’t likely to cause havoc in the markets, according to most trade analysts.
StatsCan on Tuesday pegged canola production in 2016-17 at 17 million tonnes. That compares to pre-report ideas of 15.9 to 20 million tonnes and the year-ago level of 17.2 million tonnes.
“The average trade guess was 18.1 (million tonnes) so this is below the average trade guess. I think the industry to a certain extent will view this number with caution,” said Jerry Klassen of the Canadian office of Swiss-based GAP Grains and Products in Winnipeg.
Other analysts agreed.
If StatsCan was correct, it would mean canola would have to be rationed down the line, said Mike Jubinville of ProFarmer Canada.
“A number that is less than last year raises some eyebrows. But wet conditions have prevailed in the period of time after this survey (was taken),” he noted.
The agency pegged spring wheat at 20.2 million tonnes, a number Klassen also feels is somewhat low. “I think we’ll probably see some upward revisions.”
Of the StatsCan projections, just one crop failed to meet even the low end of traders’ estimates: oats.
Jubinville said he doubts that will affect prices very much. “Milling interests feel they’re pretty well covered for the next few months. So there’s no sense of urgency.”
While everyone seems to feel StatsCan’s projections were on the lower side, one analyst pointed out the agency’s acreage numbers seem to usually be on track.
“One thing maybe we can give StatsCan credit for is their acreage estimates are pretty good,” said Neil Townsend of FarmLink Marketing Solutions in Winnipeg.
One of the surprising numbers in the survey, for him, was the durum.
“The durum number is a little light. I think 7.3 or 7.4 (million tonnes) is reasonable (as opposed to 6.8),” he said.
Peas, meanwhile, came in near the higher end of expectations. StatsCan predicted 4.6 million tonnes would be produced, compared to pre-report ideas of four million to five million tonnes.
It will be a logistical challenge to move out that inventory, Jubinville said.
“We may yet see some yellow pea prices at least on a temporary basis slip below $7 (a bushel) as we go through the off-combine delivery period. Prices should inch back higher on though,” he said.
— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow CNS Canada at @CNSCanada on Twitter.
Table: Statistics Canada crop production estimates for 2016-17, plus pre-report estimates for comparison. Production in millions of metric tonnes. Source: Statistics Canada.
|Durum wheat||6.807||6.200 – 8.500||5.389|
|All wheat||30.487||28.500 – 32.000||27.594|
|Oats||3.018||3.100 – 3.900||3.428|
|Barley||8.704||8.000 – 9.500||8.226|
|Flaxseed||0.576||0.500 – 0.650||0.942|
|Canola||17.024||15.900 – 20.000||17.231|
|Peas||4.611||4.000 – 5.000||3.201|
|Lentils||3.234||3.000 – 4.000||2.373|