August 25, 2011

 

Canadian canola crop less than expected

 

 

Although the forecast unveiled by Statistics Canada in its maiden crop production was less than the expectations of market participants, the production in the 2011/12 (Aug/Jul) crop year will be record large.

 

According to Dow Jones, the government agency pegged Canada's 2011/12 canola crop at a record 13.193 million tonnes, which was up from the 2010/11 level of 11.866 million. Pre-report ideas had called for canola output to be in the 13.142-14.2 million tonnes range.

 

"There is no doubt that the number fell at the low end of pre-report expectations and certainly had a bullish impact on canola values at ICE Futures Canada," an analyst with the Frost Forecasting Corp. in Calgary, Alberta said.

 

He said the trade had been expecting a higher yield base than what StatsCan used in calculating their production forecast.

 

An analyst with ProFarmer Canada agreed the industry was definitely looking for a larger production estimate for canola than what the report revealed.

 

A manager at GAP SA Grains and Products in Winnipeg, also felt the report suggested that yield output of the various grain and oilseed crops are a bit lower than what had been anticipated.

 

"Based on historic trends, Statistics Canada has had a tendency to raise their production estimates from the August report in their next report to be distributed in October. I do not think that will be the case this year," the manager said.

 

He said there are concerns that heat and the absence of rain after the survey was taken may have reduced canola yields by a greater percentage than anticipated.

 

All wheat production in Canada in 2011/12 was projected by StatsCan at 24.076 million tonnes, which was up from the 23.167 million produced in 2010/11 and at the high end of pre-report guesses which ranged from 22.627-24.805 million tonnes.

 

"The cereal grains in general have done much better than had been expected, given the late start to seeding and the extremely wet conditions at the start of the season," the analyst with the Frost Forecasting Corp. in Calgary, Alberta said.

 

Barley was one of the crops that actually benefited the most from the wet start and the subsequent dryness that has followed, the analyst added.

 

Barley production in Canada in 2011/12 was pegged by Stats Canada at 8.274 million tonnes. Pre-report estimates had called for output to range between 7.92 million and 8.2 million tonnes. In 2010/11, Canadian barley production was 7.605 million tonnes.

 

The analyst with ProFarmer Canada also said that while barley output may have come in at the high end of expectations, there should be no problem in absorbing some of the extra supply.