Agriculture and Agri-Food Canada released its first look at seeded acre estimates for 2017 on Monday. This early estimate includes an increase in acres seeded for all principal field crops in Canada by 499,000 acres from 2016, with a further reduction of summerfallow acres. In 2016, Statistics Canada has estimated summerfallow acres at 1.990 million acres, the lowest in records going back to 1913. The current estimate would point to summerfallow acres falling to 1.5 million acres.
As seen on the attached chart, the largest year-over year reduction in acres is seen in durum, with a 15% reduction expected to result in 5.26 million acres planted. This would be just slightly lower than the five-year average of 5.28 million acres, while above the 5 million 10-year average.
The large 2016/17 carryout is noted as affecting the decision to plant durum, with ending stocks estimated to increase by 136%, or 1.5 million metric tons in 2016/17, to 2.6 mmt, the highest stocks estimated since 2009/10, largely made up of lower quality stocks. Other limitations potentially affecting acres dedicated to durum include tight planting seed supplies as well as the crop's susceptibility to fusarium and resulting quality loss.
Acres seeded to both peas and lentils are also expected to decline. Lentil acres are expected to dip by 5% in early estimates to 5.56 million acres, still well above historical averages. This follows a significant 45% or 1.825 million-acre jump in 2016, with a slight dip tied to disease issues, lack of quality seed supplies along with the potential loss of a certain number of disheartened first-time growers in 2016. Despite the lower seeded acres, production is estimated higher, given the potential for higher yields, while prices in 2017/18 are estimated to be sharply higher which could be difficult to achieve with a potential recovery seen in India's 2016/17 production following two years of drought. Pea acres are expected to drop .9% to 4.2 million acres, also well-above long-term averages and close to the record acreage seeded in 2016.
Other year-over-year reductions are seen in corn, with acres estimated to fall by 1.5% and barley, with seeded acres estimated to fall by 3.3%. Acres planted to corn are estimated at 3.274 million acres, just slightly higher than the 10-year average with corn acres in North America viewed to lose ground to soybean plantings. Estimated barley acres at 6.178 million acres would be a three-year low and below historical averages. A drop to average yields could result in production falling by close to 800,000 mt in the upcoming crop year. On Monday, a Great Falls Tribune piece reported that both Anheuser-Busch and Miller Coors will reduce contracted acres for malt barley by as much as 60%, given large supplies carried from previous years, which may affect production opportunities on the Prairies. Lower feed grain production will be a smaller issue than in the past, given a significant carryout of feed-quality wheat and durum.
Early estimates show oilseeds such as soybeans, canola and flax gaining acres in the upcoming crop year. Soybean acres are estimated to jump by 10% to a record 6.017 million acres. An expected year-over-year drop to trend line yields is still expected to result in a record production of 6.8 mmt and would mean 10 consecutive years of increasing production. Brisk movement in 2016/17 and increasing trade tensions between the United States and China could spell opportunity for Canadian producers, with the added advantage of Canadian dollar weakness. Ending stocks are expected to rise but stocks would still remain tight at an estimated 350,000 metric tons.
Canola acres are estimated to rise by 3.1% to 21 million acres, a five-year high while capitalizing on a lower acreage seeded to crops such as durum and lentils. Projections utilizing average yields points to the 2017/18 crop year almost a carbon copy of 2015/16 and 2016/17 in terms of production, supplies, demand and carryout, given current estimates.
Oat buyers will be happy to see an estimated 6.8% increase in acres planted to oats to an estimated 3.027 million acres, just slightly higher than the five-year average. Current mill bids for quality oats have reached as high as over $3/bu. in Saskatchewan and $3.50 to $3.60/bu. in Manitoba along with a tight supply of quality stocks carried out of 2016/17 has led to renewed interest in the crop.
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