Canada Markets

The Saskatchewan government's first assessment of the crop's condition results in a summary that points to a crop rated poor to good overall, while pointing to the need for immediate relief in the way of precipitation.

Reports on Tuesday indicate that both Saskatoon and Moose Jaw are experiencing their driest conditions seen in records going back more than 100 years. Online discussions draw parallels to 1961, which is viewed as the driest year on record across the Prairies with many areas receiving 45% of average precipitation. A look back at Statistics Canada yield data shows that 1961 spring wheat yields fell by 47.8% from the previous year, barley yields fell by 27.7%, while oddly enough canola yields increased by 8.2% year-over-year. This could possibly be explained by a small acreage of canola of 710,300 acres seeded in 1961, likely located in northern regions that may have fared better for moisture.

Of the selected crops shown on the attached chart, the good-to-excellent condition rating ranges from 19% for flax up to 49% for dry peas. This compares to the three-year average for the same period that ranges from 75% to 90% for the selected crops for the same week.

Using the canola data as a benchmark, the situation is most challenging across the two central regions of the province. While the Northeast condition rating is 44% good-to-excellent, the Northwest is 37%, the Southeast is 27% and the Southwest is 20%, while the East-Central is rated 7% and the West-Central is rated at 17%.

Markets are slow to react to the situation gripping the Prairies, with U.S. weather challenges and trade issues perhaps at the forefront, but they soon will. Early in the week, precipitation maps pointed to the potential for good coverage of rain over much of the Prairies in the seven-day window, although prospects of this happening have dimmed each day since, with the models now favoring northwest Alberta along with Manitoba, a situation that is slowly being accepted in media reports.

After three consecutive lower closes, Thursday's November canola contract dipped to test its 50-day and 20-day moving averages, only to close $4.20/metric ton higher while printing a bullish outside-day bar on the daily chart. Noncommercial traders continue to hold a significant short position in canola futures and, should they panic, further upside may be possible.

Thursday's radar points to the potential for some precipitation in Alberta and across southern Saskatchewan.

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

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