The USDA has stuck out its neck in August with sharp revisions lower shown for Canada's all-wheat production (including durum) as well as canola. While the estimates will attract debate, they more closely reflect the situation faced than is currently shown by the Canadian government. The first official production estimates will not be released until Aug. 30 in Canada, while revisions to capture a lower harvested area this growing season will not be seen until the December production of field crops report.
On Aug. 12, the USDA estimated Canada's all-wheat production at 24 million metric tons (including durum). This volume is revised 7.5 mmt lower from last month and is down 31.8% from 2020-21 and would be the lowest realized since 2010. The year-over-year drop of 11.183 mmt would be the largest year-over-year drop since 1988, when all-wheat production dropped by 10 mmt, from 25.9 mmt to 15.9 mmt, according to Statistics Canada estimates.
With estimated supplies of 27.830 mmt, the USDA views Canada's export potential at 17.5 mmt, with ending stocks to fall by 800,000 metric tons year-over-year to 3 mmt, the tightest stocks seen in Statistics Canada data going back to July 1981.
The USDA reduced its forecast for Canada's canola production by 4 mmt, to 16 mmt, down 2.7 mmt or 14.5% from 2020 and would be the smallest production achieved since 2012. Despite the higher seeded acre estimate for 2021, this would result in the largest year-over-year drop in production on record, while it is not difficult to find estimates that are even lower.
The USDA views total canola supplies for 2021-22 at 17.086 mmt, with exports falling 35% to 6.9 mmt and crush falling 9.4% to 9.576 mmt, resulting in tight July 31 stocks of 710,000 mt.
Two of three prairie crop reports have been released this week. Some early spring wheat was coming off in Manitoba, as of Aug. 10, along with winter wheat, the earliest of canola crops is being swathed while the entire harvest was estimated at 5% complete as of Aug. 10. The August 2012 Saskatchewan Crop Report estimates 54% of the winter wheat, 2% of the spring wheat and no canola has been harvest as of Aug. 9, or 7% of all crops. The next few weeks will shed further light on today's estimates as combines begin to roll.
Cliff Jamieson can be reached at email@example.com
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