July 24, 2014
Canada is expecting a 7.4% drop in smaller wheat seedings this season as record rainfall and widespread flooding in parts of the Canadian Prairies during June 2014 have affected the outlook.
Sowings is likely to decline to 23.5 million acres, 9.8% smaller than a year earlier and the lowest since 2011, according to an average estimate in a Bloomberg News survey of seven analysts. For June, the government forecast 24.1 million acres before the occurrence of heavy rainfalls.
In addition, the nation's rapeseed plantings will fall to 19.1 million acres, down 5.8% from the government's June forecast.
Currently, municipalities in Saskatchewan and Manitoba declared a state of emergency after the June storms. As many as three million acres in Saskatchewan and 2.5 million acres in Manitoba have been flooded and are unlikely to produce a crop, according to estimates from Saskatchewan's government and Keystone Agricultural Producers.
While dry weather in July has allowed producers to return to the fields in south-eastern Saskatchewan, some plants remain submerged. Half of the fall-cereal crops and 57% of spring cereals in Saskatchewan are behind their normal stage of development, the government said in a July 17 report.
Manitoba farmers may lose US$1.02 billion US from the recent rain and flooding, according to Keystone Agricultural Producers, a Winnipeg-based farm group. As much as US$466 million of those losses may not be covered by existing insurance programmes, said Doug Chorney, the president of Keystone. Farmers who filed claims for excess moisture in 2011 are now paying higher deductibles for less coverage, and current programmes only cover between 50% and 75% of losses on seeded and unseeded acres, he added.
The outlook for a second straight bumper global wheat crop may limit price gains for Canadian farmers looking to recoup part of their losses. World inventories next year will rise 2.8% to the highest since 2012, according to the USDA. Futures tumbled 13% this year to US$5.2475 a bushel in Chicago.
