August 23, 2012

 

Rapeseed prices up as disease lowers Canada's expectations

 

 

After Canada pegged its harvest at 15.4 million tonnes, well below market projections, rapeseed prices bucked softness in crop markets, and crystallising concerns of damage from disease and insect pests.

 

Rapeseed futures for November delivery closed up 0.6% at CAD633.20 (US$640) a tonne in Winnipeg even as prices of fellow oilseed soy eased in Chicago.

 

The rise followed an estimate by Statistics Canada of the Canadian harvest which, while representing a record crop, was one million tonnes below market estimates, and 900,000 tonnes below the forecast from the USDA, whose data set global benchmarks.

 

Indeed, it implied a third successive season of lower Canadian rapeseed yields, to a five-year low of some 1.8 tonnes per hectare, and falling short of levels reached in 2010 and 2011 when farmers struggled with unusually wet conditions.

 

However, farmers in Canada's Prairies agricultural heartland have been reporting increased incidence of rapeseed diseases such as sclerotinia, a fungus, and aster yellows, which is spread by insect pests.

 

Farm officials in Manitoba reported this week that, for the province's crops overall, "hot temperatures during flowering and grain filling stages of crop development, moisture stress, and diseases such as root rots, sclerotinia, blackleg and aster yellows, are the main factors impacting yield and quality in 2012".

 

In Saskatchewan, farm officials have reported damage also from army worms, a moth larva, and flea beetles, with dryness also a setback in some areas, as further south in the US.

 

"There have been reports of combine fires in the field due to the extreme lack of moisture in some areas," they said.

 

Agrimoney.com has previously heard of concerns over Canada's ability to keep raising rapeseed output, given a reliance of higher acres on farmers skipping crop rotations typically regarded as best practice, in lowering disease risks.

 

The data place a question mark over Canada's ability to fill a gap in international rapeseed demand caused by prospects of a disappointing harvest in the EU, the top producer, with output expected to fall in third-ranked China too.

 

The USDA currently pegs Canada's exports of the rapeseed variant in 2012-13 at 8.70 million tonnes, in line with those the previous season, with Canada's farm ministry pegging shipments at 8.75 million tonnes.

 

In Europe, Paris rapeseed futures for November edged 0.7% higher to EUR522.75 (US$656) a tonne.

 

The StatsCan report also estimated Canada's wheat production at 27.0 million tonnes - in line with trade forecasts and the USDA estimate, and, bar the 28.5 million tonnes harvest four years ago, the biggest crop in 15 years.

 

And barley production was seen recovering by 24% to 9.5 million tonnes, lifted by expectations of a record yield, of 65.1 bushels per acre, and an increase in plantings from last year, when wet weather forced farmer to leave millions of acres unsown.