June 26, 2012

 

Canadian farmers increase rapeseed acres, trim wheat

 

 

In order to push an already expected record-large area of rapeseed even larger, Canadian farmers have taken advantage of favourable spring planting weather, while lowering their wheat seeding from an earlier forecast, according to a Reuters poll of 14 traders and analysts.

 

After two years of severe spring floods, farmers enjoyed drier conditions this year, allowing them to plant bigger areas of most crops. Canada is the world's top exporter of rapeseed, spring wheat, durum and oats.

 

Statistics Canada will estimate plantings of major crops on Wednesday (June 27), based on a survey of nearly 25,000 farmers from May 28 through June 7.

 

With ICE rapeseed futures prices hitting nearly four-year highs earlier this spring, farmers are widely thought to have planted the record-biggest Canadian acreage of the yellow-flowering oilseed for the sixth straight year.

 

On average, traders and analysts estimate Canadian rapeseed plantings at 20.9 million acres, up from the 20.4 million acres previously forecast by Statscan based on a March survey of farmer intentions. That rapeseed area would be nearly 11% higher than last year's plantings, the previous record high.

 

Farmers' zeal for rapeseed's hefty profits came in part at the expense of all-wheat acres, a category that includes spring wheat, durum and a small winter wheat area.

 

The trade pegged all-wheat area at 23.9 million acres on average, down from Statscan's forecast for 24.3 million acres, but up 11% from last year's seeded area.

 

The durum area is an estimated 4.9 million acres, down from Statscan's last estimate of 5.1 million acres and up 22% over year.

 

"Wheat and durum markets were showing weaker signals to farmers during the planting season, so it swung a few more acres to rapeseed and maybe a few other crops," said Chuck Penner, analyst at LeftField Commodity Research.

 

Successful plantings in most areas of the Prairies with favourable soil moisture levels should more than offset lost acres in areas of the eastern Prairies that were too wet, said agriculture analyst Ron Frost.

 

The trade pegs oat acres at 3.3 million, down a tick from Statscan's 3.4 million acres, and a barley area of 7.9 million acres, just below Statscan's forecast for eight million acres.

 

Bigger plantings generally point to larger harvests, assuming normal summer weather and yields. But steady rains in the past two weeks in Western Canada have stressed or drowned some crops, and yield expectations have slipped modestly, according to FarmLink Marketing Solutions.

 

Those rains likely left some fields, especially in eastern Saskatchewan, unplanted after Statscan had finished its farmer survey. The Canadian Wheat Board sees only an average-sized wheat area after excessive rains in parts of Saskatchewan curtailed planting.

 

"There's a lot of evidence of excess water and some damage, and I think that's (seen) in all crops, not just wheat," said CWB chief executive Ian White on Thursday (June 21) during a visit to the Farm Progress Show in Regina, Saskatchewan.