One acre of wheat drop surprises analysts

The outcomes of Statistics Canada’s newest Area Crop Seedling Grower Survey of 2019 increase some eyebrows, specifically the outcomes of the Wheat Seeded Space Survey.

In keeping with Statistics Canada’s principal subject crops report launched on June 26, Canadian farmers planted an estimated 24.6 million acres of wheat in 2019, down 0.6% from 2018.

The June wheat estimate was over 1,000,000 acres decrease than StatsCan’s earlier estimate of 25.7 million acres, launched about two months earlier in late April.

Canola plantings for 2019 had been reported at 21 million acres, down 8.2% from 2018, and about 300,000 acres decrease than StatsCan’s April estimate of 21.3 million acres.

Different highlights from the June report embody:

  • 3.8 million acres of lentils, up 375,000 acres from StatsCan’s April 2019 estimate and 0.3% greater than 2018 acreage
  • 4.3 million acres of inexperienced and yellow peas, 300,000 greater than Statistics Canada’s April estimate and practically 20 % greater than in 2018
  • 7.4 million acre barley plantations, up 350,000 acres from April and 14 % greater than in 2018
  • Canadian oat plantations whole 3.6 million acres, up 300,000 acres from April estimates and 18.1% greater than a yr earlier
  • nationwide soybean plantations to five.7 million acres, down 12.9 % from 2018

In whole, the report places the overall 2019 seedlings of Canada’s prime subject crops at roughly 76.7 million acres.

The June acreage report figures had been based mostly on a survey of 24,500 Canadian farmers, carried out between Might 14 and June 11.

Brian Voth, grain market analyst and president of intelligiFARM, a Manitoba-based grain advertising consultancy, stated there have been a couple of surprises within the June acreage report, beginning with the estimate. wheat.

Complete wheat plantings of 24.6 million acres are decrease than many analysts had anticipated.

And the June exhausting crimson spring wheat planting determine caught some analysts off guard.

At 18.8 million acres, Canada’s crimson durum wheat estimate was practically 500,000 acres decrease than Statistics Canada’s estimate launched two months earlier.

“I believe the most important shock was the (whole) variety of wheat (together with durum, spring wheat and winter wheat), which was down by over 1,000,000 acres per yr. in comparison with the April estimate, ”Voth stated.

“It is a huge change, taking place from April to now by 1,000,000 acres. It is fairly substantial, and clearly nobody within the enterprise anticipated it.

Voth stated he didn’t anticipate the spring wheat depend to say no from April’s estimates, given what has occurred with canola markets over the previous two to 3 months. .

StatisticsCan figures recommend that issues affecting the Canadian canola commerce have prompted extra producers to extend the acreage dedicated to oats, barley and lentils, versus increasing wheat plantations.

The canola space estimates had been additionally a bit shocking, Voth stated, particularly in mild of commerce disputes affecting canola exports and widespread early-season drought in western Manitoba, Saskatchewan, central Alberta and the Peace River area.

“Canola (acres) hasn’t declined as a lot as the common commerce estimate or our personal estimate both,” Voth stated.

“They’re down one other 300,000 acres from April, so we’re now down 8% from final yr, however we type of thought it will be over 10%. “

Some analysts, together with Voth, had anticipated a rise in acres of oats and barley, and Statistics Canada’s June figures appeared to validate these projections.

The areas of barley (up about 14 % from 2018) and oats (up 18.1 %) replicate robust market demand for these crops and low manufacturing prices relative to to different cultures.

“Oats, up (300,000 acres from April’s estimate) would not shock me whenever you have a look at the place previous crop oat costs are at,” Voth stated.

“Whenever you discuss concerning the value of oats over $ 4, you are going to have extra traction….

“Identical factor with barley. I believe barley costs hit their highest degree final week. When you’ve greater than $ 6 for feed barley, clearly rising barley will get a variety of curiosity. “

It stays to be seen what number of acres of barley and oats can be taken out of grain manufacturing and used for inexperienced meals.

Brennan Turner, president and CEO of FarmLead, a web-based grain advertising platform, stated StatsCan’s estimate of about 21 million acres of canola, a discount of about eight % from 2018, represents a year-over-year decline of practically two million acres.

However in line with Turner, the variety of StatsCan continues to be greater than the 20.57 million acres anticipated by the market.

“I believe the market was somewhat stunned that the canola acreage did not go down as a lot as folks anticipated,” Turner stated.

“Having stated that… the query is, what of these 21 million acres of canola will truly be harvested this fall, given the dry begin to the rising season.

Statistics Canada figures apart, drought situations in Might and early June might have a major influence on general canola manufacturing.

Beneath common yields and the next proportion of acres deserted resulting from poor institution may very well be mirrored in Statistics Canada’s December manufacturing report.

Turner stated a major discount in winter wheat acreage, notably in Ontario and Quebec, might have a constructive influence on winter wheat markets sooner or later.

Yr over yr, winter wheat space is down practically 30 % in Ontario and practically 50 % in Quebec, he stated.

“Between these two provinces alone, we’re speaking about about 325,000 or 330,000 (acres) of winter wheat that was right here final yr however not right here this yr,” Turner stated.

A major enhance in oat space – 300,000 acres from April’s estimate and practically 18 % greater than the 2018 plantings – is prone to negatively influence the costs of recent crops, a- he added.

“Now that many of the Prairies have rained this oat crop might be going to progress effectively, though if granted, there’s clearly rather a lot that may occur between now and when the combines roll,” he stated. Turner stated.

“However with so many extra acres of oats … that doubtlessly means a barely extra bearish value state of affairs.”

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