Each week DTN releases a 360 Poll where readers can share their opinions on issues of the day. Three of these unscientific feedback polls released this spring were tied to Statistics Canada reports. The first of the three was released in late April, prior to the release of the April 27 Principal field crop areas report where the following question was asked:
How accurate do you think the April 27 Statistics Canada's planting intentions report will be, since it's based on producer surveys held in late March?
In fact, this was not the case, given changes in methodology for the 2018 report, which was changed to polling conducted from March 2 to March 29, as compared to the March 16 to 31 period for the 2017 report. The 2018 changes could make results even more debatable, given that a March 2 response may be more than two months prior to the start of spring seeding with the possibility that intentions change over that period.
So how did producers respond to this informal poll? One-half of responses answered:
Accuracy may be a problem; I am always cautious in accepting survey findings.
A further 25% of responses answered:
Accuracy will definitely be a problem, as the spring we are experiencing may lead to a shift in crops seeded.
A further 17% responded with:
I always place more faith in the June Field Crop Areas report.
Lastly, 8% responded with the choice:
I don't know.
While we have all heard of misinformation fed to Statistics Canada during the polling process, the time lag between data collection and actual planting can play a significant role. Note that the next Principal field crop areas report will be released on June 29. In an upcoming Canada Markets Blog, we will look at historical shifts in seeded acres between the March Intentions report and the report released in late June.
Given that the seeded acres estimates were viewed as questionable by many, readers were asked the following question following the report:
What surprised you the most in Statistics Canada's April 27 seeded acreage estimates?
Of the five choices offered, all responses keyed on three of the choices offered. The overwhelming response, or 61% or responses, selected:
I do not believe in the year-over-year decline in canola acres.
It is interesting to note that while there were trade expectations that acres could hit a fresh record of 24 million acres seeded in 2018, Statistics Canada reported an estimate of only 21.4 million acres, down 7% from 2017.
Of the two remaining choices selected, 23% of respondents indicated that they did not believe the increase in estimated wheat and durum acres, with the report showing an expected 15.4% year-over-year increase in spring wheat aces and 11% increase in durum acres. A further 10% of respondents indicated that they felt that Statistics Canada understated the decline in dry pea and lentil acres, with estimates calling for a 5.5% and 8.1% decline, respectively.
The April 27 report could suggest corrections will follow in the upcoming June report. ProMarket Wire analyst Errol Anderson, also a DTN contributor, told The Western Producer, "The StatsCan model is wrong. It is broken and they have to fix it. Somebody has to shake up that department," while going on to say that the canola, wheat, barley and pulse estimates are all dead wrong.
The final poll in this series asks the question:
The accuracy of Statistics Canada's March 31 stocks will depend largely on the estimate of farm stocks, with the farm stocks of the major grains increasing by roughly 7% since the same date in 2017 while commercial stocks fell. Which crop do you think will create the biggest challenge in the estimation of farm stocks?
Estimation of farm stocks is key to the findings in this report that was released on May 11, with significant jumps in farm stocks from March 2017 reported of 18.2% for canola, 19.1% for corn, 58.1% for soybeans and 41.1% for lentils, to name a few. Swings were also seen in the other direction, with farm stocks of barley estimated 28.3% lower.
Two responses stand out from others given the six choices offered. Roughly one-third of respondents chose canola as being the most difficult crop to estimate when it comes to farm stocks. This could help explain the manner in which the canola market has reacted since this report.
Given an overall 14.4% increase in March 31 canola stocks reported on May 11 (farm and commercial), the July future ended the day only $.90/mt lower, while carrying on to reach a contract high on May 24. AAFC has since increased its 2017/18 carryout estimate by 500,000 million metric tons to 2.5 mmt, up 1.152 mmt or 85% from the 2016/17 crop year, while overall demand continues to trail year-ago levels. In recent weeks, the nearby July future has remained in the top 10%, even the top 5% of the range traded over the past five years prior. Despite the huge jump in stocks, as of week 44, producers have delivered 3.9% less volume into licensed handling facilities, while some prairie crushers continue to show positive basis levels in the June/July period.
A similar number of responses selected Choice 5:
I think that it would be difficult to create an accurate estimate for on-farm stocks of any crop.
The final two selections were split almost equally between the farm stock estimate for pulses as well as the estimates for wheat and durum. Of interest in this poll was that there were no responses for Choice 6, which stated:
I don't follow these reports.
This suggests that respondents for this particular poll all take some degree of interest in the data released, despite concerns surrounding the difficulty in accurately estimating stocks.
The current DTN 360 Poll asks the following question:
Prime Minister Justin Trudeau recently hinted to a United States news audience that Canada is considering allowing U.S. exporters increased access to Canada's dairy market. What do you think the government should do regarding Canada's supply management system, especially as it continues to come under attack in international trade negotiations?
You can weigh in with your thoughts on this poll that is found at the lower right side of your DTN Canada Home Page.
Cliff Jamieson can be reached at email@example.com
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