June 22, 2009

Statistics Canada's June 23 acreage update won't show the full impact of weather, and industry participants are already second-guessing the numbers.

 

"The second-guessing will be because of the lateness of the development of the various crops, the impact of frost and the timing of the survey," said Ken Ball, a broker with Union Securities Ltd.

 

Ball said there was a lot of ongoing re-seeding because of frost damage from when the survey was likely taken. In some regions, he said, producers were still trying to plant the original crop, which was delayed because of excessive dryness or moisture.

 

"There was probably a fair amount of acreage shifting occurring as a result, but the question of how much is what the industry is now looking for," Ball said.

 

Jerry Klassen, an independent trader and grain analyst, said he felt the acreage report from Statistics Canada will further provide an idea of what was actually seeded this spring. But the industry also is anticipating some potentially large changes from this report because of the weather.

 

"Frost certainly played a role on canola crops right across western Canada, and it will be interesting to see how those producers responded," Klassen said. "How much canola did those producers rip out?"

 

Klassen said he knows of a producer who planted 5,000 acres to canola and, because of the frost, ploughed it all under and seeded barley instead.

 

"This kind of reaction by the producers is not going to be reflected in the acreage survey update," Klassen said.

 

Ball said market participants expected the canola acreage base to have climbed from the base released in a planting-intentions report by Statistics Canada in April.

 

"The numbers in the June 23 report may show that increase but, because of the weather, that number could actually be down," Ball said.

 

Pre-report estimates for area planted to canola ranged from 15.0 million to 16.1 million acres.

 

Barley plantings were seen ranging from 8.8 million to 10.0 million acres, while oat area was forecast at 3.5 million to 4.3 million. All wheat area in Canada was seen at 23.5 million to 25.2 million acres.