Canada Markets

Ahead of Wednesday's Statistics Canada seeded acre estimates, there may exist a great deal of uncertainty in forecasting Canadian seeded acres. Producers face continued demand uncertainty in pulses traded to India and durum to Italy, with canola exports to China now also in limbo.

The attached chart highlights the range of pre-report estimates based on a merging of two media polls, with the low estimate and high estimate shown as a percent change from Statistics Canada's 2018 estimated seeded acreage.

Of the eight crops, there is trade consensus on three, based on data from the two surveys. Canola acres are estimated to fall anywhere from 1.4% to as much as 15% from 2018. It remains to be seen how producers will react, due to uncertainty, although there is a great deal of discussion supporting the notion the producers may come close to maintaining traditional rotations. Arguments for this include seed supplies for alternative crops that may be tight while other markets could face oversupply and pressure on prices, given a massive shift into a competing crop. Agriculture and Agri-Food Canada is currently forecasting a modest 2.5% drop in acres.

Other commodities where consensus exists are flax and oats. Across the two reports, flax acres are estimated to grow by 5% to 28.4% from 2018 levels, while oat acres are estimated to grow by 1.5% to 14.6% from the 2018 area.

Another crop that is highly likely to see 2019 area reduced is durum, although note the range of estimated acres varies from a 25.6% reduction from 2018 to a 6.7% increase. This is the widest range shown for the selected grains.

One crop that could lead to a surprise, given the media surveys, is wheat (excluding durum). As seen on the attached chart, wheat acres are estimated to range from a drop of 2.7% from 2018 levels to a year-over-year increase of 8%. This trails the current AAFC estimate pointing to an 8.7% increase, while recent private estimates have ranged as high as 10% over 2018 levels.

Statistics Canada will release its April 24 report at 7:30 a.m. CDT.

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DTN 360 Poll

This week's poll asks how you view prospects for spring seeding. Please share your thoughts on this poll, located on the lower-right side of your DTN Canada Home Page.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Follow him on Twitter @Cliff Jamieson

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