Greater crop production estimated prior to StatCan report

MarketsFarm — Analysts are expecting Canadian crop production totals for the 2022-23 marketing year to be substantially higher compared to drought-stricken 2021-22, but still not enough to fully replenish supplies.

Statistics Canada (StatCan) will publish its first satellite image model-based yield and production estimates for principal field crops on Monday. Traders and analysts are interested in seeing how much Canadian crop production can rebound this year after suffering from a historic drought last year.

However, late seeding due to heavy rains in the eastern Prairies, as well as drought in parts of the western Prairies, could also affect numbers.

“Those crops in western Saskatchewan (in the) dry regions are certainly below average,” MarketsFarm director of markets and weather Bruce Burnett said. “Barley and canola are grown in the northern grain belt. Those areas are very good in terms of conditions they have received. I think production numbers have moved up for those crops.”

Analysts are also keeping in mind the data collected by StatCan is only up to July 31, right before a warm and dry August hit much of the Prairies.

The near month-long lag between the data collection and the report’s release raised criticism, including from MarketsFarm Pro analyst Mike Jubinville.

“I can understand where you have to canvass (10,000) to 15,000 farmers and pool results together. It takes time. But why do you have to wait a month to release a satellite image model? It doesn’t make sense,” he said. “There’s going to be some element of this report where people will think, ‘Ho-hum. It’s old news.'”

Canola production was top of mind for many others, as the lack of production last year — with a total crop of 12.6 million tonnes — caused prices to reach record highs. Estimates for 2022-23 canola production range from 18.6 million to 20.3 million.

Ken Ball, a Winnipeg-based trader from PI Financial, provided the lowest estimate for canola.

“That’s a pretty mediocre canola crop. It’s below average,” he said. “It will be sufficient to start the year with comfortable supplies. The wild card is Australia, who had a big canola crop last year and could grow a bigger one this year, but they have quite a way to go.”

Independent Winnipeg-based trader Jerry Klassen, who estimates 20.3 million tonnes for canola, thinks co-operative weather will raise yields.

“Temperatures haven’t been overly hot this year for the canola crops this year and we’ve had some timely rains that have maybe offset some of the heat problems,” he said. “Canola crops are in pretty good shape across the Prairies, except in western Saskatchewan.”

Total wheat production appears to have greatly improved in the eyes of the trade, with this year’s production projected to exceed last year’s — 21.652 million tonnes — by at least 10 million tonnes.

“For wheat, we’re seeing very good yields in Manitoba and eastern Saskatchewan. I think we’re going to see some pretty good yields in pockets of Alberta,” said Klassen, who estimated 35 million tonnes of wheat, including 6.5 million of durum.

“Cereals tend to be looking a little better from what we hear, relative to canola and pulses,” said Winnipeg-based trader Jon Driedger, vice-president of Leftfield Commodity Research.

“Spring wheat would be considered average-plus. Barley and oats are probably doing a little better yet. We’re a little bit cautious with durum yields, as production is concentrated in those areas of Alberta and Saskatchewan that are still quite dry.”

Only corn and lentils have projected production to be on track with last year’s totals. Oats are estimated to have the greatest year-by-year improvement in production totals, ranging from 4.4 million to 4.7 million tonnes after only growing 2.606 million tonnes in 2021-22. Barley production is projected to exceed nine million tonnes after falling short of seven million last year.

However, Jubinville believes this year’s crops could have performed better.

“Taking an average from lopping off the worst and lopping off the best, we’re in a fairly average-yielding crop right now,” he said. “The next question will be quality and assuming that we don’t get any early frost and such, I think we should be alright.”

Table: Recap of trade and analyst pre-report expectations, in millions of metric tonnes. Statistics Canada’s 2021-22 principal field crop production totals are provided for comparison purposes.

* – ‘All wheat’ includes spring wheat, durum wheat, and winter wheat remaining after winterkill.