CNS Canada –– Canada’s major agricultural crops likely yielded a bit better than earlier estimates, and most industry participants anticipate Statistics Canada’s production numbers will be revised higher in a report due out Thursday.
However, the extent of those adjustments could be limited.
“The (production) numbers will probably go up for all commodities… wheat, durum, barley, canola should all see increases to varying degrees,” said market analyst Bruce Burnett with CWB in Winnipeg.
The previous survey was conducted in September when the harvest was just getting started, he said. “When farmers did actually get on the fields, I think yields exceeded expectations.”
“If we don’t see an increase in the production estimates, depending on the commodity, it will be fairly bullish,” said Burnett.
Durum, for one, will be watched closely, he said, as it already saw a slight downward revision in the Oct. 3 report and supply/demand fundamentals are tight.
Early pre-report estimates call for Canadian durum production of 4.6 million to 5.4 million tonnes, which would compare with the previous StatsCan estimate of 4.756 million and the 2013-14 level of 6.505 million.
All-wheat production, which includes durum, is forecast at 27.4 million to 28.1 million tonnes, which compares with the October forecast of 27.481 million and the year-ago level of 37.53 million.
While actual yields may have been up slightly from the previous report, production “for virtually all commodities will be down by 20 to 25 per cent from last year,” said Burnett.
Canola production will also be watched closely, as supply/demand fundamentals are also considered tight.
After the record-large 17.966 million-tonne canola crop in 2013-14, estimates on the size of the 2014-15 crop range from about 14 million to 14.9 million tonnes. StatsCan pegged production at 14.079 million in the earlier report.
“If the crop is unchanged, or only up a couple hundred thousand tonnes, it won’t be enough,” said Ken Ball of PI Financial in Winnipeg.
“We really need something closer to 14.8 million tonnes of canola to balance things out, and if it’s not there it could cause a reaction” in the market, he said.
While anecdotal harvest reports point to better yields, some yield increases may be countered by adjustments in harvested acres.
“We’re still not sure what the acres will do,” said Keith Ferley of RBC Dominion Securities in Winnipeg.
“We might see a pull down in acres and a bump up in yields,” which could cancel out any changes to the total production number, he said.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.
Table: A quick summary of pre-report trade estimates ahead of the Statistics Canada production report due out Dec. 4, 2014. Production in millions of metric tonnes.
|Durum||4.600 – 5.400||4.756||6.505|
|All wheat……||27.400 – 28.100||27.481||37.530|
|Oats||2.600 – 2.800||2.685||3.906|
|Barley||7.000 – 7.400||7.119||10.237|
|Flaxseed||0.900 – 1.000||0.922||0.724|
|Canola||14.000 – 14.900….||14.079……….||17.966|