There was little in the way of surprises in Thursday's Statistics Canada Production of field crops, November 2018 report, although the uncertainty over what was actually harvested in terms of yield and quality will likely continue to affect market activity during upcoming months.
The report stated that the interviews took place over the Oct. 5-to-Nov. 13 period, while Alberta's final crop report on Oct. 30 indicated that 95% of the province's crop was harvested, with the Northwest Region of the province estimating the crop being 87% harvested.
Canada's all-wheat production for 2018 was estimated at 31.769 million metric tons, an upward revision from the estimate released in September and a level that falls closer to the higher end of the range of pre-report estimates. Ahead of Thursday's report, Commodity News Service reported a range of pre-report estimates from 30.4 mmt to 32.247 mmt. This volume is 6% higher than 2017 and 1.3% higher than the five-year average, with a higher harvested area across all three prairie provinces offsetting a drop in yield. The year-over-year increase in the country's all-wheat production was split between an increase in durum production of 783,000 metric tons and wheat up 1 mmt.
Spring wheat production was estimated at 23.511 mmt, the highest in five years, while hard red spring wheat production was pegged at 19.608 mmt, representing 83.4% of the spring wheat production, a percentage down from the previous year's 86.6% but equal to the five-year average. The average Canadian spring wheat yield fell 1.5 bushels per acre to 50.5 bpa in 2018, which includes a .3% year-over-year drop in Manitoba, a 1.5% drop in Saskatchewan and a 5.6% drop in Alberta.
Durum production was estimated at 5.745 mmt, marginally higher than the estimate released in September, 15.8% higher than 2017 and well-within pre-report estimates which indicated a range from 5.4 mmt to 6.2 mmt. This report could be viewed as bearish for the durum market, given current licensed exports that trail the 2017-18 pace by 22.5% as of week 17.
Canada's canola crop production potential was trimmed from the estimates released in September, given challenging harvest conditions. Only once in the past 10 years has the November estimate been revised lower from the September estimate, while this is the first time in four years. Production was estimated at 20.243 mmt, down 4.6% or 985,000 mt from 2017 and at the lower-end of the range of pre-report trade estimates that ranged from 20.2 mmt to 21.3 mmt. This is a first time that production has fallen in four years, with the news combining with a weaker Canadian dollar trade to support prices in today's trade despite weakness across the soy complex. While this report may result in a cut to AAFC's ending stocks estimate, it is important to note that both crush and exports remain behind the year-ago pace and could also lead to a reduction in 2018-19 demand estimates.
Canada's barley production was estimated at 8.380 mmt, up 6.2% from last year with an increase in harvested acres offsetting lower yields, while is 1.2% below the five-year average. This estimate was within the range of pre-report estimates, which ranged from 8 mmt to 8.5 mmt.
Oat production was increased slightly from the September estimates to 3.436 mmt, down 8% from last year on lower harvested acres and lower yields. This estimate is just slightly higher than the 3.1 mmt-to-3.4-mmt range of pre-report estimates.
Dry pea production was revised lower from the September estimate to 3.581 mmt, the lowest production in three years, down 13% from last year and down 10% from the five-year average. This volume landed in the lower-end of pre-report estimates that ranged from 3.6 to 4 mmt, while could prove supportive for pulse markets as traders watch the dry conditions affecting India's rabi crop continue to deteriorate.
Lentil production was also estimated lower from the September estimate to 2.092 mmt, the lowest level in four years, down 18.2% from 2017 and 16.6% below the five-year average.
Soybean production was estimated at 7.267 mmt, down 5.8% from 2017 and the first year-over-year drop in soybean production in 11 years, a period that saw production soar from a low of 2.686 mmt to a 2017 high of 7.716 mmt, according to Statistics Canada data. Canada's harvested acres were estimated to fall 976,500 acres or 13.5% from 2017, with a modest drop in Ontario of 1.8%, while Manitoba's acreage fell by 18.1% (414,600 acres) and Saskatchewan's area fell by 52% (440,400 acres). Alberta reported 17,100 acres, the first time that Statistics Canada reported for this province. When yields are considered, the country's average yield increased 3.4 bpa, to 42.5 bpa, slightly higher than the 41.7-bpa five-year average, with significant increases seen in Quebec and Ontario, where a record 51.4 bpa was achieved, while Manitoba's' average yield fell by 5 bpa, to 31.1 bpa, from the previous year, below the province's five-year average of 36.5 bpa.
Canada's corn production was revised lower from the estimates released in September, pegged at 13.885 mmt, 1.5% below the 2017 crop size and 2.9% higher than the five-year average. The harvested area rose in both Ontario and Manitoba. The country's average yield fell by 5.1 bpa, to 154.6 bpa, slightly lower than the country's five-year average, with a 1 bpa year-over-year drop estimated for Ontario along with a 15-bpa drop experienced in Manitoba to a four-year low.
The entire Prairies crop (including all major grains) is estimated at 71 mmt based on Statistics Canada data, down .8% from the previous crop year, but 1.5 mmt higher than the five-year average.
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