Canada Markets

Growing up on a Saskatchewan farm, a wise and respected neighbor, always optimistic over the potential for the crop, would say, "What you lose on the hills, you'll gain in the hollows." While there remain many difficult situations in southern areas of the Prairies this year due to a lack of rainfall, for the second year, it would seem that crops in Manitoba and many northern areas could still result in large production overall for the Prairies.

This week's first ever Grain World crop tour across thePrairies resulted in average yield estimates for spring wheat and canola that exceed the same period last year as well as the five-year average. Spring wheat was estimated at 54.4 bushels/acre, which compares to Statistics Canada's five-year average for the Prairies of 49.24 bpa. The tour reported an estimated average yield of 41.9 bpa for canola, which would be above the 41 bpa achieved in 2017 while also above the five-year average of 39.52 bpa. Durum was estimated at 39.01 bpa, above the 35.3 bpa realized Senior Market Analyst Neil Townsend told media this week, "We saw some short (crops), tall ones, thin ones, fat ones... but we didn't see much that would measure out as a disaster."

As seen in Thursday's Canada Markets Blog, the Saskatchewan government's condition ratings lead to crop condition indices for many crops that vary only slightly from average levels for the last week in July, with the index calculated for spring wheat equal to its five-year average, while the index for canola is only 3.6 points below its average. The index calculated for durum, at 124, is well below its five-year average of 158.6.

Friday's Alberta Crop Report shows further deterioration in the estimated condition of the province's crop, with the good-to-excellent rating for all crops combined falling by 7.5 points to 64.1% G/E, the third consecutive drop while the second-largest week over week drop seen this season. The good-to-excellent rating for spring wheat has shown decline for seven-consecutive weeks to 66%, only three points higher than where it was this time last year. At the same time the government has released an early estimate of spring wheat yield at 46.4 bpa, below the 47.3 bpa estimated in their initial yield estimate last year.

The attached chart shows the 10-year trend in Prairie yields and production for spring wheat, canola and durum. The 2018 estimates are calculated using this week's crop-tour yield estimates, along with Statistics Canada's seeded-acre estimates and AAFC's harvested-acre estimates. This chart would suggest there could still be a big crop harvested this fall across the Prairies.

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

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