Friday, 30 November 2012 21:59
WINNIPEG: Canada's wheat crop, the third-largest in 13 years, was slightly bigger than the most recent government estimate indicated, while the country's disappointing canola harvest was also a tad larger than first thought, according to a Reuters poll of 16 traders and analysts.
Statistics Canada, a federal government agency, will issue its final crop production estimates for the 2012/13 crop marketing year on Wednesday, based on a farmer survey.
With problems affecting wheat crops in the United States and South America, bigger supplies from Canada, the world's No. 3 wheat exporter would be welcome.
Demand for the oilseed canola is also strong from Canadian processors and export markets after untimely heat and winds this summer curbed the harvest's potential.
Traders and analysts estimate, on average, Canada's all-wheat crop at 27.1 million tonnes, up 1.4 percent from Statistics Canada's last estimate on Oct. 4, and a jump of 7.3 percent from last year's harvest.
There should be no problem finding buyers for that wheat, said Darren Frank, a market analyst at FarmLink Marketing Solutions. Conditions are dry in the United States' winter wheat-growing areas, and rain has hampered crops in Argentina and Australia, on top of poor harvests in the Black Sea region.
"Anybody looking for large tenders, once the European Union is finished (shipping wheat), are going to have to come to us," Frank said. "You just don't have the supplies from the other players."
The International Grains Council on Thursday cut its forecast for the global wheat crop in 2012/13 by one million tonnes to 654 million, which would be 41 million tonnes below the prior season's output.
The all-wheat category is made up mainly of spring wheat and durum wheat. Frank sees the durum crop bigger in particular from Statscan's last estimate, due to better yields.
The trade sees Canada's canola harvest at 13.7 million tonnes, up 2.6 percent from Statscan's last estimate but down 5.5 percent from last year's crop.
"(I) still think acres were underestimated, and average Saskatchewan yield is too low," said one grain industry source who expects the canola estimate to rise. Saskatchewan is Canada's biggest canola- and wheat-growing province.
Trade estimates for canola production ranged by more than 1 million tonnes, from as small as 13 million tonnes to as large as 14.4 million. Canada is the world's biggest grower and exporter of the oilseed, used mainly in vegetable oil.
Frank said that although Statscan traditionally raises its canola estimate in December, its last estimate did not account for strong winds in Saskatchewan and Alberta in early September that damaged fields of ripening canola.
"The West is a pretty big area, so you're always going to have hail storms, wind storms, but that one covered a pretty big area, and a big canola area. We lost some sizable bushels."
Statscan's previous crop production report shocked the canola market with a surprisingly low figure. But it is unlikely anything in this report will move markets significantly, said Jerry Klassen, Winnipeg manager of Swiss-based marketer GAP SA Grains and Produits.
"This is going to be a fine-tuning," Klassen said. "This report is already factored into the market."
The trade expects no significant adjustment to Statscan's production estimates for oats, at 2.9 million tonnes, and for barley, seen around 8.6 million.
Copyright Reuters, 2012