June 24, 2011

 

Wet weather cuts Canada's wheat estimate

 

 

Canada's farmers planted less wheat this spring than planned due to wet weather, Statistics Canada reported on Thursday (Jun 23), but analysts say plantings are likely even smaller than the report indicates because flooding worsened after the agency's farmer survey.

 

Stats Can reported that rapeseed plantings rose from the earlier estimate to a record high, but the trade doubts the crop forecasts are realistic.

 

The government statistics agency itself noted that flooding caused delays and uncertainty around planting and its estimates may change in its next report August 24.

 

Traders and analysts have said for days that they expected the report to inflate plantings since excessively wet conditions in June kept many farmers from seeding their fields as intended.

 

Farmers planted 23.6 million acres of all-wheat up 11.9% from last year, but lower than Statscan's April estimate of 24.7 million acres. Rapeseed area is estimated to increase nearly 18% from last year to a record 19.8 million acres, surpassing the previous forecast for 19.2 million acres.

 

ICE Canada rapeseed futures dove nearly 3% after the report's release, but weaker outside markets played a bigger role than Stats Can's large planting estimate, traders said.

 

The report does confirm that farmers were determined to plant as much rapeseed as possible, and the oilseed's planted area is likely still record-large, although not as big as Stats Can projected, Ball said.

 

Stats Can's area estimates for all-wheat and spring wheat in Western Canada, the region that produces most of the country's harvest, are each 9% higher than estimates from the Canadian Wheat Board last week.

 

The board's numbers are still the best current assessment of this year's crop areas, said CWB director of weather and market analysis Bruce Burnett.

 

The next key question will be how many planted acres farmers will have to abandon due to flooding, Burnett said.

 

Stats Can forecasted 6.7 million acres will go unplanted this year, the third-smallest fallow areas in the past decade and a sharp 42% drop from last year, when flooding was worse.

 

The Canadian Wheat Board forecast last week that 6-8 million acres would go unplanted in Western Canada alone.

 

Stats Can lowered planting estimates for barley and durum, but areas of both crops will increase 3% and 39% respectively from last year, the report said.

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