August 31, 2011

Canada's farmers plant 14% less grain than intended

As a result of wet weather during seeding, Canadian farmers planted 14% less grains than originally planned from April through June, according to Hamburg-based Oil World.

The area seeded with wheat, corn, barley and oats fell to 13.9 million hectares (34.3 million tonnes) this year, down from intentions of 16.2 million hectares before planting started, the researcher said in a report. Wheat growers seeded 8.75 million hectares, down 13% from intentions, Oil World said.

"Excessively wet conditions prevented timely plantings in the spring of 2011," Oil World said. "The difference between actual plantings and intentions is most pronounced for the four major grains."

Production of the grains will outpace last year's crop, also cut by rainfall during harvest, by 1% at 45.2 million tonnes, Oil World said. Wheat output will rise 3.9% to 24 million tonnes, barley production by 8.7% to 8.27 million tonnes and oat growers may collect 2.89 million tonnes, up 26%, according to the report.

Wheat futures prices on the Chicago Board of Trade are little changed this year and corn is up 22%.

Canola production will rise 6.5% to 13.2 million tonnes, Oil World said. Stockpiles will fall 8.2% from a year ago to 900,000 tonnes, the researcher said. That is less than half the 2.12 million tonnes that were in storage at the end of the 2009-2010 marketing year, according to the report.

As stockpiles are expected to be low, exports will decline 4.9% to 6.8 million tonnes, the researcher said. Canada is the biggest shipper of the oilseed. Domestic processing of the grain will rise 0.6%, Oil World said. Canola futures on ICE Futures Canada in Winnipeg are up 25% in the past year.

Canadian soy production may fall 11% to 3.86 million tonnes this year as adverse weather during the growing season cut yields, the company said. Domestic use will rise 2.5% while exports are expected to drop 11%, according to the report. Soy prices are up 2.8% this year.

"Weather was less than ideal this year and the average yield is expected to decline," Oil World said. "With Canadian soy crushing likely to rise, we expect soy exports to be reduced."