Canada Markets

Statistics Canada released its final production estimates for 2016 under challenging circumstances, with the survey period ranging from Oct. 21 to Nov. 13 conducted while harvest was ongoing.

For example, the closest Saskatchewan crop report to the end of the survey period was released Nov. 21 indicating the harvest was 95% complete, while the Alberta Crop Report as of Nov. 15 shows the province 87% complete, suggesting much of the data obtained early in the survey period was outdated by the end of the period. As always, the report states that revisions to estimates can be made for up to two years following the report release.

The report highlights a large Canadian crop overall, with year-over-year production estimated higher for most major field crops except for flax (38.5%), oats (8.2%) and corn (2.7%), with year-over-year reductions shown in brackets. The total prairie crop including all major grains is estimated at 70.9 million metric tons, second only to the record crop of 76.6 mmt produced in 2013. While yields were favorable, the large crop was also a result of a record seeded acreage, with summerfallow acres reported at a record low of 805,200 acres, down 22.3% from 2015 and 732,600 acres less than were reported in 2013 when Canada's record crop was achieved.

Canada's all-wheat crop is estimated at 31.729 mmt, up 15% from last year. This is only the second time since 1991 that Canada's all wheat production estimate is higher than 30 mmt, although the latest Alberta Crop report shows that an implied 700,000 mt of spring wheat was yet to be harvested as of Nov. 29. The average of pre-report estimates showed an estimated 30.7 mmt. Canada's estimated all-wheat average yield is pegged at 53.2 bushels per acre, a three-year high and well above the five-year average.

Durum production was estimated at 7.762 mmt, a whopping 44% higher than estimated for 2015 and well-above the 7.2 mmt average of the pre-report trade estimates. This report is likely to weigh further on global durum prices, while spreads may continue to widen further on the Prairies. Latest AAFC supply and demand estimates had previously shown durum ending stocks in Canada growing 100% from 2015/16 to 2.2 mmt in 2016/17. Meanwhile exports are currently behind the pace needed to reach the 5 mmt target set for the year and today's report added yet another 500,000 mt in production.

Canola production was estimated at 18.424 mmt, up just .3% from the volume produced in 2015. The average of pre-report estimates suggested an expected crop of 18.8 mmt, while supplies could be tightened further with an estimated 750,000 mt trapped in the field over winter in Alberta, given data released in their last crop report. The estimated Canadian yield is estimated at a record 42.3 bpa, well-above the five-year average of 35.5 bpa. The canola market is trading higher today, although it is also seeing bullish spill-over support from other oilseed markets and prices have failed to hold at session highs.

Barley production was estimated at 8.784 mmt, the second annual production increase achieved and in-line with both the August estimate and pre-report estimates. Oat production was estimated at 3.147 mmt, above pre-report estimates although 8.2% below 2015 levels. This is only slightly below the five-year average for oats.

As expected, record pulse production was reported, with dry pea production estimated at 4.836 mmt, up 51.1%, while lentil production was estimated at 3.248 mmt, up 27.9% which is equal to the year-over-year increase seen from 2014 to 2015. Both were estimated close to the average of pre-report estimates.

Canada's row-crop estimates point to a better-than expected crop for both soybeans and corn, with both production estimates higher than Statistics Canada's August estimate, Statistics Canada September model-based estimates and the average of pre-report estimates. Corn production is estimated at 13.193 mmt, down 2.7% from 2015 and above the five-year average. Current supply and demand tables are impacted little, with AAFC estimating Canadian corn ending stocks close to unchanged in 2016/17 at 2.2 mmt. While production in Ontario increased a modest .8% from last year, Quebec production fell 8.9% while Manitoba growers increased production by 48%, producing more than one million metric tons for only the second time. The country's average corn yield is estimated at 158.7 bpa, down from last year's 164.7 bpa record but well-above the five-year average of 151.2 bpa.

Soybean production in the country was reported to increase by 1.4% to a record 6.463 mmt. While Ontario production fell 9.5% from 2015, production in Quebec increased 4% to 1.04 mmt, while Manitoba growers produced a record crop for the province at 1.769 mmt. If achieved, Canada's total production of soybeans has increased for nine consecutive years. The overall average yield for soybeans is pegged at 44.1 bpa, below the record 45 bpa estimated in 2012, while above the 42.8 bpa five-year average.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Follow Cliff Jamieson on Twitter @CliffJamieson

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