(Adds graphic, analyst's comment, details on yield, other
By Rod Nickel
WINNIPEG, Manitoba Aug 21 Canadian farmers are
on course to produce less wheat and canola than expected,
according to Statistics Canada's first report on this year's
Statscan, using a farmer survey, pegged the 2014/15
all-wheat crop at 27.7 million tonnes, down 26 percent from last
year's record harvest and below the average trade expectation of
28.5 million tonnes. Canada is projected to be the
fourth-largest wheat exporter this year.
Canola production in the biggest global exporting country
looked set to reach 13.9 million tonnes, a drop of 23 percent
from last year and less than the average trade forecast of 14.5
"I think the trade is going to view this report as fairly
friendly (to price)," said Dave Reimann, market analyst for
Cargill Ltd's grain marketing services division. "The canola
number is going to jump out a little bit because we're looking
at a tightening supply situation versus last year, and this
turns the screw one more turn."
ICE Canada November canola futures and Minneapolis
September spring wheat futures were up slightly after
Despite the production drop, the all-wheat crop is Canada's
third-largest in the last 10 years and the canola harvest would
be the third-biggest ever. Statscan said yields look lower
year-over-year at 43.6 bushels per acre for spring wheat, 39
bushels for durum and 32 bushels for canola.
The smaller than expected canola crop raises questions about
whether there is enough to supply domestic crushers and export
sales, said John Duvenaud, analyst at Wild Oats Grain Market
Advisory, on a conference call organized by Minneapolis Grain
Exchange. Tighter supplies could give canola prices more upside
later in the year than soybean oil, a competitor in the global
vegetable oil market, he said.
Expectations for a big U.S. soybean crop otherwise overhang
Similarly, global wheat supplies looked to top 716 million
tonnes, a record high, according to a U.S. Department of
Agriculture report on Aug. 12.
Canada might also have bigger than usual leftover supplies
from last year's bumper harvest. Statscan will estimate on Sept.
5 stocks as of July 31.
"In Western Canada, we're moving from a huge glut of wheat
to still a pretty big carry-over, but by no means the kind of
over-supply we had in the last year," Duvenaud said.
The harvest is off to a slow start in Western Canada, with
much of the crop developing more slowly than usual.
Duvenaud said the quality of crops is still unclear.
Fusarium head blight, a fungal disease, has downgraded some
winter wheat and may damage spring wheat as well.
Crops of oats, barley and durum also look sharply smaller
year over year, and smaller than expected.
(Additional reporting by Alex Paterson in Ottawa; Editing by
Lisa Von Ahn and Marguerita Choy)