August 8, 2011

 

Canada slices wheat crop estimate for third time

 

 

For the third time, Canadian farm officials cut their forecast for the local wheat yield, removing hopes of export recovery from the world's top three wheat exporter.

 

Canada's farm ministry, AAFC, gave up on hopes that harvested area of wheat, excluding the durum variety used in making pasta, would rise from last year's rain-effected levels, following a second season of dismal weather for growers.

 

"Subsoil moisture conditions range from adequate to excessive," AAFC said, adding that the conditions had left crop development "significantly more uneven than usual".

 

The estimate for harvested area was cut by 330,000 hectares to 6.96 million hectares, compared with 7.02 million hectares for last year's crop.

 

With prospects for durum output waning too, Canada pegged its total wheat harvest at 23 million tonnes, one million tonnes below its previous estimate and taking its forecast 167,000 tonnes below last year's result.

 

The downgraded production estimate prompted the ministry to cut by 800,000 tonnes to 16.1 million tonnes its forecast for exports in 2011-12, ditching hopes of a rebound in shipments from last season, when 16.5 million tonnes were shipped.

 

The estimate for inventories at the close of 2011-12 was kept at a "low level" of five million tonnes, a figure beneath which stocks have fallen only once, four years ago, in at least the last half century.

 

USDA attaches in a report published on Wednesday foresaw a lower harvest figure for Canada, of 22.4 million tonnes, but higher exports, of 17 million tonnes, leaving carryout stocks even thinner, at 4.6 million tonnes.

 

The briefing also highlighted a potential impact from delays in spring sowings, noting "concerns that wheat quality may be impacted if there is an early frost", before farmers can gather in their harvest.

 

AAFC also trimmed estimates for harvests of coarse grains and oilseeds, thanks to lower estimates for the area that would make it through to harvest.

 

However, it stood by a forecast of a record 13.4 million-tonne harvest of rapeseed, the rapeseed variant thanks to better hopes for yields, adding that farmers could expect higher prices for the oilseed than the CAD567 (US$578.42) a tonne they received in 2010-11 as well.

 

"Prices are forecast to rise on support from high world prices for soy, palm oil and crude oil," the ministry said, lifting its estimate for 2011-12 values to CAD$580-620 (US$591.69-$632.49) a tonne, from CAD560-CAD600 (US$571.28-$612.09).