Canada Markets

Agriculture and Agri-Food Canada's first supply and demand estimates for 2020-21 were released in the January Canada: Outlook for Principal Field Crops report. This study acts as a starting point for the year while is revised over time as official Statistics Canada data becomes available.

Early estimates indicated that seeded acres for grains and oilseeds will increase in 2020, while acres for pulses and special crops will decrease slightly. Overall seeded acres for Canada's principal field crops is estimated at 78.1 million acres, up 0.5% from 2019, while harvested acres are forecast to rise 1.3% to 74.8 million acres. One wild card will be the areas that experienced excessive precipitation in the fall and will seek to resume harvest in the spring. Such a forecast will likely require summer fallow acres to fall for a third straight year, which were reported at the lowest on record going back to 1913 at 1.729 million acres in 2019.

Estimates include slightly higher yields based on average levels, while total production of all principal field crops is estimated 2 million tons higher at 95.324 million metric tons. Total demand is forecast at 97.149 mmt, up 731,000 metric tons from the previous year, with a year-over-year increase in forecast exports offsetting an expected decline in domestic use.

Ending stocks for all principal filed crops are forecast to rise by 730,000 mt at 16.060 mmt.

The attached chart show the forecast swings in seeded acres, exports and ending stocks for selected crops. Looking at the blue bars or seeded acres, we see a forecast drop in acres dedicated to barley, corn, canola and soybeans, ranging from a 2.1% drop in canola to a 3.2% drop for barley.

On the positive side of the chart, producers are forecast to increase oat acres by 9% and durum acres by 15.2%, despite a year-over-year drop in the estimated price range forecast. In the case of durum, this will simply bring seeded acres back to the five-year average, while oat acres would be 21% above average and the highest acres seeded in 12 years.

The brown bars represent the year-over-year change in forecast export demand, with exports forecast to rise for both canola and soybeans along with wheat. Forecast exports for both peas and lentils are shown to fall.

The grey bars represent the year-over-year change in forecast ending stocks for the selected grains. Current projections point to a year-over-year increase in ending stocks for dry peas, oats, wheat, durum, corn and barley. Of these crops, early indications indicate that the range of dry pea prices is expected to remain unchanged in 2010-21, while the expected range for the other crops shown here is reported lower.

Stocks of canola, soybeans and lentils are expected to fall.

AAFC continues to view heavy global supplies of grain weighing on markets in 2020-21, while Canadian dollar weakness remains supportive for prices.

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