Canada Markets

What Statistics Canada Estimates Means for 2019-20 Supplies

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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The brown bars on this chart represent crop year supplies, utilizing Statistics Canada's model-based production estimates and July 31 stocks estimates, along with AAFC estimates for crop year imports. This is compared to 2018-19 supplies (blue bars) and the five-year average (grey bars), measured against the primary vertical axis. The black line represents the year-over-year change, as measured against the secondary vertical axis. (DTN graphic by Cliff Jamieson)

Statistics Canada's second crop production estimates released in two weeks resulted in a higher overall estimate for Canadian production, as has been the trend since the two reports have been released starting in 2015. The Sept. 12 report is a model-based report as of Aug. 31, which includes estimated areas released in previous reports, while the previous report was based on farm surveys conducted between July 4 and Aug. 5.

Canada's all-wheat production was increased 1.24 million metric tons since the release of the first report, which included a 644,000 mt increase in spring wheat production and 578,000 mt of durum production.

At 4.998 mmt, estimated durum production is down 13% from 2018 and 14% below the five-year average. As seen on the attached chart, when the most recent production data is added to Statistics Canada's July 31 stocks estimate along with AAFC's forecast for crop year imports, total supplies for the current crop year are estimated at 6.632 mmt, down 7.8% from 2018-19 and below the five-year average of 7.2 mmt.

Canada's wheat production (excluding durum) is estimated at 27.493 mmt, up 3.9% from 2018 and 12% higher than the five-year average. This is largely due to estimated spring wheat production of 25.752 mmt, which would be the largest production in six years and 18.7% higher than the five-year average. As seen on the attached chart, Canada's wheat supplies are forecast to rise by 1.6% from last crop year to 31.6068 mmt, the largest in four years, while remaining above the five-year average of 30.4 mmt.

Canada's canola production was revised 905,000 mt higher in Thursday's estimates to 19.358 mmt, which is down 985,000 mt from the official estimate for 2018. When forecast imports and July 31 stocks are added, crop year supplies for 2019-20 total 23.3 mmt, up 1.5% from 2018-19, growing for the seventh consecutive year and to a record high. Given current AAFC estimates, stocks would be poised to grow higher in 2019-20, although AAFC is using an export forecast of 9 mmt while the USDA has Canada pegged to export 10.2 mmt.

As seen on the attached chart, supplies of oats, barley, flax, peas and lentils are forecast to grow year-over-year. The largest year-over-year increase is seen for peas, with supplies to grow by 18.2% in 2019-20 to 5.075 mmt, a record level of supplies and above the five-year average of 4.4 mmt. This is largely due to an expected increase of 30.5% in Prairies' pea production to 4.672 mmt. Exports will be key to this balance sheet over the year ahead.

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