October 8, 2012

 

Canada's 2012 rapeseed harvest down

 

 

Canada's 2012 rapeseed production was much smaller than farmers anticipated and well below last year's production, setting up a tug of war for supplies from the world's biggest producer and shipper of the oilseed.

 

All-wheat output appears slightly lower than previously forecast, Statistics Canada on Thursday (Oct 4) said.

 

Rapeseed production will be 13.36 million tonnes in 2012-13, down two million tonnes from the government agency's August 22 estimate of 15.4 million tonnes and below last year's harvest of 14.5 million tonnes.

 

The trade was anticipating a lower estimate, but the new figure was more than one million tonnes below the average forecast.

 

ICE Canada November rapeseed futures shot up 3% after the report, before paring those gains.

 

"The report is very supportive for rapeseed," said commodities broker Ken Ball of Union Securities in Winnipeg. "It is a shock in that it's a low number. We knew the crop was down; we didn't know if it would show up on this report."

 

Midsummer heat during rapeseed's vulnerable flowering period, disease and a windstorm all reduced the potential of Canada's crop. The average rapeseed yield fell to 28.2 bushels per acre, the lowest level in five years.

 

"A crop of that (smaller) size will require some serious demand rationing to occur," said Dave Reimann, market analyst with Cargill Ltd's grain marketing services division.

 

Canadian rapeseed crushers, such as Cargill, Richardson International Ltd, Bunge Ltd and Archer Daniels Midland Co, collectively have processed record volume for seven straight years, but extending that string may prove challenging, even with new capacity being added.

 

Rapeseed importers - such as China, Japan and Mexico - are faced with either finding oilseed substitutes or paying up for small, pricey Canadian rapeseed supplies.

 

Still, rapeseed's upside is limited by its "drastically expensive" price compared with other oilseeds used to produce vegetable oil, such as palm oil, Ball said.

 

Canada, which is also the biggest shipper of spring wheat, durum and oats, is wrapping up the harvest of most of its crops. All-wheat production is estimated at 26.7 million tonnes, just below the previous estimate of 27 million tonnes but still well above last year's harvest of 25.3 million tonnes.

 

The wheat crop looks to be the biggest in three years and the third-largest since 1999 - a bright spot for a global wheat trade concerned about severe drought hitting the Black Sea region. The estimates look neutral for wheat and durum prices, Reimann said.

 

Average all-wheat yield of 42.1 bushels per acre was slightly below expectations. Traders surveyed by Reuters expected, on average, rapeseed production of 14.6 million tonnes and an all-wheat harvest of 27 million tonnes.

 

StatsCan surveyed 11,657 farmers September 4-11. The oat harvest slipped modestly to 2.9 million tonnes. Durum wheat production looks bigger than last year, but just below expectations at 4.4 million tonnes, while barley output is also larger than last year at 8.6 million tonnes, but below the trade view.

 

Canada is a minor producer of corn and soy, and some of those crops have been expected to backfill US supplies, which were curtailed by severe Midwest drought.

 

The eastern province of Ontario has also suffered dry conditions, however, and StatsCan trimmed Canada's corn estimate by 1% to 11.6 million tonnes, and soy production by almost 3% to 4.3 million tonnes.