December 5, 2011

 

 

As favourable late-summer and autumn weather boosted yields, Canada's rapeseed harvest jumped 6% from the government's last projection, grain traders and analysts say.

 

A trade survey ahead of Statistics Canada's final crop production report of 2011, due on Tuesday, estimated on average that the rapeseed crop jumped to 13.7 million tonnes, nearly one million tonnes greater than last year's harvest.

 

"We had an optimal growing season. The biggest factor for yields is rain and we had lots of moisture," said Jerry Klassen, manager of GAP SA Grains and Products in Winnipeg.

 

Statscan tends to be conservative with earlier estimates in the crop year before raising production figures in the December report, Klassen added.

 

Spring flooding in parts of Manitoba and Saskatchewan prevented some farmers from planting, but the ample precipitation ultimately helped crops like rapeseed produce big yields in most of Saskatchewan and Alberta once weather turned hot, several analysts said.

 

"All in all, I think numbers are going to creep up from where they were," said Ron Frost, an Alberta-based agriculture analyst.

 

For its October report, Statscan surveyed farmers when they were worried about the effects of scorching mid-summer heat, resulting in the government agency pegging Western Canada's lowest average rapeseed yield in four years and little change to wheat yields over year.

 

The situation likely improved since that report with favourable late-summer harvest conditions that allowed farmers in Alberta to harvest late-developing crops, analysts said.

 

The trade expects Statscan to report slight increases to its estimates of the all-wheat, durum, barley and oat crops. All-wheat production looks to reach 24.5 million tonnes, traders said on average, up 1.4% from Statscan's October estimate and up 5.8% from last year's crop.

 

Flooding followed by drought-like conditions stressed Manitoba's spring wheat crops, holding in check the boost in all-wheat production, Klassen said.

 

Canada is the top exporter of rapeseed, spring wheat, durum and oats.

 

Despite the big rapeseed crop, year-end supplies are likely to be slightly below average, with Canadian crushers on a brisk pace and export demand strong, Klassen said.

 

A big increase in Statscan's rapeseed estimate is unlikely to weigh down ICE Canada rapeseed futures much, since the boost is widely expected, Frost said. Rapeseed prices might be more prone to jump if the estimate is lower than expected, he said.

 

The futures contract slumped to a 13-month low last week, weighed down mostly by investors' worries about macroeconomic factors like the euro debt crisis.

 

"If we do not get a bigger number, then we start looking at a pretty tight scenario (for rapeseed)," Frost said. "The bullish number has a chance of a much bigger reaction than a bearish number."

 

Statscan surveyed 28,659 farmers from October 24-November 10 for the December 6 report.