Industry bracing for potentially large StatsCan crop estimates

CNS Canada — Canadian farmers are sitting on large crops ahead of this year’s harvest, although just how large remains to be seen as industry participants await Statistics Canada’s first survey results of the crop year, set for release on Tuesday.

Pre-report trade estimates on canola production range anywhere from 16 million to 20 million tonnes, with the majority of guesses coming in at over 18 million tonnes. That compares with the 17.231 million tonnes grown in 2015-16. Earlier in the growing season, some analysts had tossed out numbers of over 22 million.

“What we’re seeing here is a repeat of 2013,” said Jerry Klassen, manager of the Canadian office of Swiss-based GAP Grains and Products in Winnipeg, referring to the record-large crops grown that year.

“Fertilizer was cheap this spring, so they just poured it on,” said Klassen. With harvest operations in their early stages, he added, excellent yields were being reported for most of the main crops, “with the caveat being peas and lentils.”

StatsCan is typically known for being conservative in its August report, with upward revisions common in subsequent reports, said Klassen.

However, some industry participants are of the opinion that actual production might end up below the Aug. 23 estimate, as the survey was conducted in late July before severe weather caused problems in some areas of the Prairies.

Neil Townsend, market analyst with FarmLink Marketing Solutions, said his company was scaling back its estimates due to weather events. “There are still very large crops, but not as large as they were at one time.”

However, Townsend acknowledged the tendency for StatsCan to revise estimates higher, adding “I’ll take a wait-and-see approach.”

For wheat, pre-report estimates range from 28.5 million to 32 million tonnes (spring, winter and durum wheats combined), compared to the 27.594 million grown in 2015. Of that total, durum estimates range from about 6.2 million to 8.5 million tonnes. Canada grew 5.389 million tonnes of durum the previous year.

While wheat production will likely be up on the year, Townsend said quality issues may limit how much of the crop hits the top grades.

“There are some concerns with disease issues in the cereal grains,” Klassen said, but added those issues “will be offset with the larger yield estimates.”

Barley production is forecast at anywhere from eight million to 9.5 million tonnes, which compares with 8.226 million in 2015-16.

Peas and lentils both saw sizeable increases in planted area on the year. While trade guesses still point to record-large Canadian pulse production, excess moisture and flooding in the major growing areas cut into the overall potential.

Trade estimates on the size of the pea crop range from about four million to five million tonnes, which compares with 3.201 million the previous year. Lentil production is pegged at three million to four million tonnes, up from 2.373 million in 2015.

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow him at @philfw on Twitter.

Table: A quick summary of the pre-report estimates ahead of the Aug. 23 Statistics Canada production report. Figures in millions of metric tonnes.