Canada Markets

Agriculture and Agri-Food Canada's first look at 2022-23 can be summarized as higher seeded acres overall, sharply higher yields, production and export potential while ending stocks are forecast to grow for most crops. Along with a larger crop comes a forecast for lower prices, with all crops to see a drop in price from the levels achieved in the current crop year.

The study includes several assumptions including the 2021-22 carryout, input availability and a significant easing of the drought conditions faced in 2021.

Seeded acres of the major crops in 2022 are forecast to increase by 1.6 million acres from the 2021 estimate to 79.5 million acres. Statistics Canada is currently forecasting 2021 summerfallow acres at 1.3365 million acres, which leads to questions over where the acres will be found.

Of the major crops, acres seeded to wheat (excluding durum) are forecast to rise by 4.7%, durum by 9.5%, oats by 8.3%, soybeans by 6.8%, dry peas by 6.7%, lentils by 3.3% and corn by 0.5%. Included in select principal crops that are forecast to fall year-over-year are barley acres, forecast to fall by 1.7%, canola by 3.2% and flax by 2.6%.

Despite the ongoing drought conditions, estimated yield for all prairie crops is revised sharply higher, while corn and soybean yields are revised slightly lower than achieved in 2021. Yields for most crops are estimated at-or-near their respective five-year average (2017-21), although yield estimates for canola, flax and oats are above average and closer to their respective 20-year trend. For example, the estimated canola yield is shown at 41.2 bushels per acres (bpa), which is close to its 20-year trend of 41.3 bpa.

This comes at a time when much of the western Prairies are reported at a maximum of 85% of normal soil moisture, as of Jan. 17, while scattered areas are showing soil moisture from 40% to 60% of normal. A heavy reliance on spring rains will be required to break the drought pattern.

Of the largest of the principal field crops, only corn production is forecast to be lower than achieved in 2020-21 as seen on the attached chart (blue bar), while across all principal field crops, AAFC is forecasting a 36.3%, or 25.263 million metric tons, increase to 94.869 mmt, gaining back 83.8% of the year-over-year drop from 2020-21 to 2021-22. As seen on the attached chart, canola production is forecast to increase 7.605 mmt and wheat by 6.638 mmt (or 9.5% for all-wheat, including durum).

Based on current supply and demand estimates, stocks are forecast to increase across several crops in the crop year ahead, with stocks of all principal field crops to rise by 2.585 mmt, to 10.2 mmt. Of this volume, an increase of 1 mmt are for wheat (excluding durum), 700,000 metric tons are for barley, 300,000 mt are durum, 300,000 mt are for oats and 200,000 mt are canola, accounting for the majority of the year-over-year change in stocks.

As seen with the blue line with markers, measured against the secondary vertical axis, forecast prices for the select crops are all lower year over year, with the smallest changes seen for wheat at $60/mt, corn at $35/mt and soybeans at $40/mt.

This report acts as a starting point and will be revised monthly and will incorporate official Statistics estimates as they become available during the year.

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

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