April 25, 2012

Canadian farmers intend to plant more wheat than anticipated

Following a record-large rapeseed crop, Canadian farmers plan to plant nearly a million acres more wheat than the grain industry expected, Statistics Canada reported Tuesday (Apr 24) in its first forecast of 2012 planting intentions.

Drier-than-normal weather in Western Canada, stretching back to last summer, brought previously flooded land back into production this spring.

All-wheat plantings may rise to 24.3 million acres from last year's 21.5 million acres, blowing away the average trade estimate of 23.4 million acres in the first year farmers can sell their wheat or barley to buyers other than the Canadian Wheat Board.

"I don't think the numbers will be taken all that seriously yet," said Ken Ball, a commodity broker at Union Securities in Winnipeg. "It's an intentions report, not an acreage report, and farmers continue to make changes to acreage plans all through April."

Statistics Canada surveyed 13,432 farmers across the country between March 23 and 30 however planting has just started in pockets of the Prairies.

Canada is the biggest exporter of spring wheat, durum, oats and rapeseed. Durum wheat area looks to span 5.1 million acres, up 27% from last year and a big jump from the average trade estimate of 4.5 million acres.

Rapeseed acres will reach 20.4 million acres, up from last year's record-large area of 18.9 million acres, and in line with the average trade estimate of 20.6 million acres. It would be the sixth straight year farmers have raised the record planting level.

With rapeseed prices not far off contract highs, the oilseed stands to possibly snatch more acres back from wheat and barley, said Keith Ferley, a commodity trader at RBC Capital Markets.

ICE Canada November new-crop rapeseed futures firmed modestly after the report. Oat plantings look to be 3.4 million acres, just as traders forecast, and compared to 3.1 million acres a year ago.

Statscan expects farmers to plant eight million acres of barley, up by nearly one-quarter from last year, and higher than trade expectations for 7.7 million acres.