Statistics Canada's September crop production estimates, derived from the agency's model-based approach, resulted in a record Canadian corn production estimate of 14.5 million metric tons, up sharply from 13.8 mmt estimate released in late August based on producer surveys conducted in July. Private forecasters are suggesting that a further upward revision remains possible, given results revealed in a private Ontario crop tour earlier this fall.
The model was expected to result in a higher yield potential, as it was for several other crops. Over the past three years (2014-2017), the model resulted in a higher yield estimate each year, ranging from an upward 3.2% adjustment to a high of 5.2%, while the September production estimate averaged 4.4% higher than the July results over this period.
Harvested acres were left unchanged this month at 3.556 million acres, up 2.4% from 2017. While Manitoba's crop size is estimated at 1.6 million metric tons, unchanged from the July estimates released last month, Quebec's potential output was boosted by 200,000 metric tons from the July estimates to 3.8 mmt. Ontario's estimate was increased by 500,000 mt to a record 9.1 mmt. Canada's overall production was increased from 13.8 mmt based on July estimates, down 2.2% from last year, to a record 14.5 mmt, up 2.6% from last year. This volume would be roughly 1 mmt higher than the five-year average and will test the demand side of the equation in the year ahead
The attached chart shows the 20-year (1998-2017) trend in Canada's corn yield. The 160.1-bushel-per-acre average estimated in September's model-based estimates would be the highest average yield achieved in three years but still remains 2.2% below the 20-year trendline yield of 163.8 bpa. At the same time, results from a private crop tour suggest that Ontario's production remains understated in this week's September estimates, which could see average yield pushed closer to trend if not higher.
On Wednesday, a tweet sent by a private forecaster following a two-week tour of Ontario indicated, "Today, Stats Canada reported in their August 'satellite-based computer model' record yields for ON vs. July farmer survey report for corn and soybeans at 169.3 and 49.1, respectively, but still lower than the 2018 Great ON yield Tour at 179.5 and 50.2 bpa respectively." Leaving estimates constant in Manitoba and Quebec, such a yield would add 544,000 mt to the province's production, reaching 15.044 mmt nationally with the national average yield surpassing the 20-year trend.
Time will tell how the boots-on-the-ground method compares to the eye-in-the-sky method.
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