Canada Markets

In advance of Statistics Canada's April 21 Principal field crop areas report, the first official look at Canadian 2017 planting intentions based on producer surveys, here is a look at how past reports compare to the final estimated acres for selected crops, reported in early December.

As seen on the attached chart, crops that tend to be overstated in the spring intentions report, both in 2016 and on average over the past five years, are spring wheat, barley, oats and flaxseed. Of this group, only spring wheat and oat acres were overstated in each of the five years from 2012 to 2016. Spring wheat acres were overstated by 4% in 2016, while were overstated by 3.1% on average over the past five years. Oat acres were overstated by 4.6% in 2016 while by 9.1% on average over the past five years (2012-2016).

Of the selected crops, the estimate for seeded acres of flax was the most overstated in 2016, off by 16.1% in 2016 while overstated an average of 8.5% over the past five years.

Of the selected crops, the spring estimates tend to underestimate acres seeded to canola, soybeans and lentils. In 2016, spring estimates understated canola acres by 5.3%, while final acres have averaged 5.5% higher over the past five years. Final soybean acres were 3% higher in 2016 while on average were 4.3% higher. Final lentil acres were 14% higher than estimated in 2016 while on average are 15% higher. Final acres were estimated higher than spring estimates in each of the past five years for all three crops.

A number of factors may come into play that can affect actual acres planted and vary results from the early Statistics Canada surveys, which normally take place over the last two weeks of March. Thursday's DTN Canada Weather Blog by Joel Burgio, DTN senior ag meteorologist, points to increased chances of a wet weather pattern in the last half of April, while further discussion points to the potential for this pattern to be delayed until early May. Bloomberg perhaps relayed an even gloomier message in their piece titled "Soggy Prairies Threaten Vital Grain Planting Season in Canada."

Futures spreads may be pointing to concerns surrounding such reports. Despite early calls for more canola acres to be planted along with an expected record soybean acreage planted in the United States and in Canada, the new-crop November/January canola spread has narrowed $1.50/mt so far this week to minus $2.30/mt (January trading over the November). This is a weak carry and could be viewed as bullish given the spread's low percentage of the overall cost of carry between the two contract months. This bears watching, a sign of growing concern among commercial traders.

DTN 360 POLL

This week's blog asks how you view the prospects of the wheat market for the upcoming year. You can weigh in with your thoughts on this week's blog, found at the lower right of your DTN Homepage.

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

Follow Cliff Jamieson on Twitter @CliffJamieson

(ES)

© Copyright 2017 DTN/The Progressive Farmer. All rights reserved.