Canada Markets

Ontario's Winter Wheat Crop Takes a Beating

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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The blue bars represent Statistics Canada's winter wheat remaining estimate, including this week's preliminary estimate for 2019, as measured against the primary vertical axis. The brown line with markers shows the remaining acres as a percentage of fall-seeded crop, as measured against the secondary vertical axis. (DTN graphic by Cliff Jamieson)

Statistics Canada's June 26 preliminary acreage estimates were viewed as one of the supportive features in June 27 wheat futures session. Canada's all-wheat area (spring wheat plus winter wheat plus durum) is forecast at 24.595 million acres, down 0.6% from 2018, while below the range of industry pre-report estimates ranging from 25 million to 26 million acres.

While spring wheat acres are estimated up 8.4% from 2018 at 18.772 million acres, the March estimate resulted in a more robust switch to spring wheat at 19.387 ma, up 12% from the previous year. Despite the smaller-than-expected increase in this area, the current estimate still results in the largest spring wheat area seeded since 2001 when the acreage was approximately 1 million aces higher. The current estimate would result in seeded acres more than 2 million acres higher than the five-year average.

The June estimate for durum saw estimated acres fall to 4.894 ma, down 20.9%, with the March estimate showing an 18.8% reduction that would result in an acreage of 5.021 ma. This area would be the smallest in five years, and 12.8% below the five-year average. The International Grains Council tweeted on Thursday that Canada's forecast decline in production along with increasing demand in the United States and Morocco is forecast to lead to the lowest global stocks for 2019-20 seen in five years.

The largest percentage move in wheat acres is seen in winter wheat acres. As can be seen on the attached chart, winter wheat acres remaining have slipped to an estimate of 929,200 acres as of June's preliminary report, down 1.265 million acres estimated in March and the lowest acreage estimated since 984,200 acres were estimated for 2002, as indicated by the blue bars on the chart. The five-year average is close to 1.5 million acres, while the 10-year average is close to 1.7 million acres.

Statistics Canada data points to a sharp revision lower in the winter wheat remaining estimate, almost entirely due to a lower revision in Ontario. Statistics Canada's winter wheat remaining as a percentage of seeded acres is calculated at 69%, while as seen on the attached chart, plunges sharply (brown line) from the 88.7% calculated in 2018 and compares to the five-year average of 90% and the 10-year average of 91%. This is by far the lowest percentage reported in Statistics Canada data going back to 1991.

Manitoba's 40,500 acres of winter wheat remaining represents 89.2% of the winter wheat seeded, Saskatchewan's 104,500 acres is 95% of acres seeded and Alberta's 79,900 acres is 79.9% of the total acres seeded. The 656,100 acres reported as remaining in Ontario represents 65.4% of the 1.003 million acres planted. Over the past 10 years, an average of 95.6% of the planted crop remained in spring estimates, while close to 100% of this area would be harvested.

While there could be some uncertainty surrounding the number of acres abandoned for some time, a May 22 CBC report quoted an Ontario ag specialist that while some good patches existed in the province's crop, early estimates indicated that a range of 20% to 40% of the crop was viewed as "no good." The province's Field Crop Report as of April 29 indicates that a challenge existed in identifying how much of the crop to keep.


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