Statistics Canada today released its fall 2016 report looking at fall rye and winter wheat seeded areas, showing 1.4745 million acres of winter wheat seeded in Canada. This would be the second-lowest winter wheat area planted since 2002 and down 48% from the record-high of 2.818 ma planted in the fall of 2007 for the 2008/09 crop year.
As indicated by the blue bars on the attached graphic, Ontario is by far the largest producer; the province expected to reduce winter wheat acres by 125,000 acres, or 13%, to 875,000 acres. This is based on fall 2016 planting for the 2017/18 crop year. This is despite an exceptional crop harvested in 2016. Ontario's average winter wheat yield is estimated at 90.9 bushels per acre, as reported by Statistics Canada, 15.9% higher than estimated for 2015 and 16.5% higher than the five-year average. Yield estimates may still be understated, with the Ontario provincial government estimating the average yield at 95.9 bpa in its 2016 Cereals Seasonal Summary.
In addition, a year-over-year decline of 20% in seeded acreage in Manitoba, and a further 35% cut in Alberta's acreage, combined with lower acres estimated in Ontario far offsets the 6% or 15,000-acre increase estimated for Saskatchewan.
As Canada's wheat acreage falls overall, with Statistics Canada reporting Canada's wheat acres at 15.982 ma in 2016 (excluding durum) which has fallen for three consecutive years, winter wheat acres have remained steady as a percent of total wheat acres. In 2016, the country's acres of winter wheat (seeded the fall of 2015) accounted for 10.5% of total wheat acres, which is slightly higher than the five-year average of 10.1% and equal to the 10-year average of 10.5%.
While lower acres of winter wheat may be tied to weak market signals, as well as the delayed harvest faced in the Prairies which acted to limit the planting of fall crops, the reaction is nothing compared to that seen in the United States. Agrimoney.com reports the United Nation's Food and Agriculture Organization joining in with other analysts to forecast the U.S. winter wheat acreage will reach 100-year lows.
While this may appear encouraging for the market at first glance, the FAO also notes increased plantings of winter wheat this fall in Russia, Ukraine, India and Pakistan, while also pointing to "low price prospects" for 2017/18. The International Grains Council also recently released estimates indicating that global winter wheat plantings in the fall of 2016 will change little from the acreage planted in 2015. This is despite estimates for a record carryout this crop year, which could still grow on paper before this crop year ends with Australia's government announcing expectations of a record wheat crop to be harvested while Statistics Canada also reported expectations of a larger-than-expected wheat crop.
It's a crop that can't get a break, with someone in the world ready and willing to plant the crop, nullifying any impact from reductions in acres in North America. In Thursday's G20 AMIS Market Monitor report, winter wheat conditions were reported as favorable or generally favorable for all global growing areas.
Cliff Jamieson can be reached at email@example.com
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