Canada crops bigger than expectedCanada produced record wheat and canola crops this year, more than expected, according to Statistics Canada’s final 2013 crop output report on Dec. 4.
By: Rod Nickel, Reuters
WINNIPEG, Manitoba — Canada produced record wheat and canola crops this year, more than expected, according to Statistics Canada’s final 2013 crop output report on Dec. 4.
Favorable weather boosted yields across the fertile western provinces, the government agency said in its report, which is based on a farmer survey.
The monster crops highlight a logjam of moving grains and oilseeds from country elevators to ports by rail, when Western Canada was experiencing heavy snow and frigid temperatures last week.
Canada is usually the world’s second- or third-largest wheat exporter and the biggest shipper of canola, a cousin of rapeseed used largely to produce vegetable oil.
Statscan pegged the all-wheat crop at 37.53 million metric tons, well above its October estimate of 33 million metric tons and the average trade expectation of 33.8 million metric tons.
The crop erased the previous record of 32.1 million metric tons set in 1990.
Canola production reached 17.96 million metric tons, above Statscan’s previous estimate for nearly 16 million metric tons and the average trade guess of 16.9 million metric tons.
The previous record of 14.6 million metric tons was set in 2011.
“To say that the trade will be somewhat surprised is maybe an understatement,” says Dave Reimann, a market analyst for the grain marketing services division of Cargill Ltd.
Statscan’s estimates exceeded even the highest guesses in a Reuters survey of the industry. But they are realistic, Reimann says.
“We have heard some tremendous yield results during harvest, and so it may not be out of line,” he says, adding that grain transportation problems this autumn pointed toward huge output.
ICE Canada January canola futures turned lower after the report was released. Minneapolis Grain Exchange March spring wheat tumbled 0.5 percent in early trading, setting a contract low.
Production of durum wheat jumped 41 percent year over year to 6.5 million metric tons, easily exceeding trade expectations for 5.7 million metric tons.
Output of oats and barley reached 3.9 million and 10.2 million metric tons respectively, significantly higher year over year and higher than trade expectations.
The production forecast looks bearish for oats in the long term, but shorter term, a shortage of railcars for shipment to the U.S. offers some underlying price support, says Randy Strychar, president of Ag Commodity Research in Vancouver, British Columbia.
Chicago Board of Trade oats for March delivery dipped 0.6 percent in early trading.