June 24, 2009

The 2009 western Canada acreage estimates released Tuesday (June 23) by Statistics Canada are seen changing in subsequent reports due to late planting and re-seeding.

 

"Nothing in the report really jumped out at me, but we're in that position where it's only 60 percent to 70 percent a seeded acres report and still 30 percent to 40 percent a planting intentions report. When the data was gathered, we were not anywhere close to being done seeding in some areas," said Ken Ball, a broker with Union Securities Ltd. in Winnipeg.

 

Statistics Canada pegged canola at 15.825 million acres, in line with pre-report estimates. Based on conversations with growers, however, Ball said he thinks most canola acres that were torn up were not re-seeded to canola, which would place actual acreage below Tuesday's figure.

 

"Barley seems to have been the most common choice for re-seeding, along with durum and some oats. We could see those numbers eventually come up," Ball said.

 

Barley was pegged by StatsCan at 8.778 million acres, durum at 5.580 million and oats at 3.879 million.

 

Vic Lespinasse of GrainAnalyst.com said since the government compiled the data, drought in western parts of the Canadian prairies worsened and frosts may have damaged some canola fields.

 

"These adverse weather influences were not factored into this morning's numbers, making them subject to larger-than-usual revisions later in the season," he said.

 

Mike Jubinville, president of ProFarmer Canada, said he doesn't expect StatsCan's numbers to have much of an impact on the futures markets because production is more about yields than acres.

 

"Right away the trade is going to be adjusting this acreage number due to re-seeding and late planting, but they'll be more inclined to be concerned about what yield potential may be and we're certainly off to a less-than-ideal start in a lot of areas," Jubinville said.

 

"We'll go back to trading on weather issues and outside market influences," he said.

 

Spring wheat acreage, pegged at 17.485 million acres, was a tad higher than expected, but the all-wheat figure, at 24.932 million, was slightly below the March 31 estimate and less than last year's 25.009 million acres.

 

"Does it have any real market influence? Probably not, but, at least on spring wheat, it was a bit higher than what the Canadian Wheat Board was projecting a week and a half ago," Jubinville said.

 

Jubinville said StatsCan's figure for the area seeded to dry peas was on the low side. Acreage was pegged at 3.745 million acres, compared with 4.205 million in the March 31 report and 3.995 million acres planted last spring.

 

"Historically, 3.745 million pea acres would be pretty large but we have to consider that considerable pea acres are located in the drought areas. There again, the acreage numbers are an issue but yields will be more important," Jubinville said.

 

Pea inventories could eventually tighten, but whether that affects prices will depend on what export demand is, he added.

 

As for barley and oats, that both acreage numbers were on the low side reflects the reality of what their prices and return potential were at the time of the survey, Jubinville said.

 

There are ample supplies of both grains now, but the figures suggest that a tightening supply situation could evolve in the second half of the 2009-10 crop year provided usage remains comparable to what it has been this year, he said.

 

None of the numbers in the report were unreasonable or particularly shocking, said Brian Wittal, owner of Pro Com Marketing Ltd. in Alberta.

 

"The key thing now is going to be yield estimates over the next two months and how weather evolves," he said.