Gaining (Some) Ground?
Grain prices across Western Canada generally dipped this week with only canola and CPS wheat getting some legs. This week, Statistics Canada released its satellite and climate data-based grain production estimates. Compared to their estimates back on August 31, this report was more bearish for all crops grown in Canada, especially wheat (read our separate note on Russian wheat production growth). Technically, the only crops that got smaller were canary seed, flax, and mustard.
For canola, StatsCan’s satellites show a potential record crop of 19.7 million tonnes. This figure is a far cry from their previous phone call-survey based estimate of 18.2 million tonnes! Soybeans yields in Canada are estimated to average 42.2 bushels per acre for a total crop of 8.3 million tonnes. The previous estimate in August was 7.74 million tonnes. It's worth noting that average yields in Ontario will hit a new record of 49.3 bushels per acre. That's a full bushel better than the previous record set in 2012.
Total wheat production is estimated at 27.1 million. This number is slightly above the USDA's estimate last week of Canadian wheat output this year of 26.5 million tonnes. It's also a far cry from StatsCan’s August estimate of 25.5 million tonnes. More notably, spring wheat is estimated at 20.1 million tonnes, much better than the 18.9 million tonnes forecasted back on August 31st. National average spring wheat yields in Canada are expected to come in at 47.2 bushels per acre. This is down more than 9% from 2016’s 52 bushel-per-acre-average haul.
From a provincial perspective, Alberta will hold the title of largest spring wheat producer this year at an estimate of 8.4 million tonnes. Comparably, StatsCan’s survey-based estimates pegged Alberta spring wheat production at 7.87 million tonnes. Average yields are expected to fall 10% in 2016 to 53.5 bushels per acre this year in the Wildrose province. The reason for the title is mainly because harvested acreage is up almost 17% from last year. In Saskatchewan, spring wheat output in 2017 is pegged by the satellites at 7.4 million tonnes, thanks to an average yield of 39.6 bushels/acre. In August, that estimate from StatsCan was 7 million tonnes.The 5-year average is 9.1 million tonnes.
For durum, the satellites suggest a 4.3-million-tonne crop. This is a healthy improvement from the 3.9 million tonnes forecasted 3 weeks ago. However, the 5-year average is still nearly 5.9 million tonnes. Average yields are pegged at 31 bushels per acre, a drop of more than 1/3 from last year’s crop. Adding to a smaller crop is acreage is down 13% from 2016.
For corn, StatsCan’s satellites estimate a 14.3 million tonnes. In the Great White North. August's estimate from StatsCan was 13.65 million tonnes while the USDA is currently calling for a 13.9-million-tonne crop. It's worth noting that Ontario’s average corn yields are estimated at 169.5 bushels per acre. The record was 170.6 set in 2015. On the pulses, peas production out of Canada was pegged at 3.86 million tonnes, only slightly higher from the 3.79 million tonnes previously estimate. Lentils got a bigger boost, with the new estimate now at 2.44 million tonnes. In August, it was 2.29 million tonnes.
Finally, for barley, the satellite estimate was very similar to August's at 7.3 million tonnes. For oats, the satellites suggest 3.8 million tonnes of production in Canada this year, versus the previous survey-based estimate of just under 3.7 million tonnes. Rye production was also similar at 333,6000 MT this turn versus the August estimate of 326,000 MT
While the numbers on barley are somewhat bearish, there has been some improvement in the price of late. We think that now is a pretty good time to lock in some movement of either feed grains (i.e., feed barley or feed wheat) and winter cereals (i.e., winter wheat or fall rye) It will put some cash in your pocket while we wait for better prices in oilseeds and milling wheat (Gain some marketing ground and get your wheat tested!)
President & CEO | FarmLead.com