Canada Markets

With the September USDA data soon to be released, I thought it would be interesting to look at the USDA's performance in estimating the size of the Canadian crop over time.

The attached chart plots the USDA's Canadian all-wheat estimate against the final Statistics Canada estimate over the 2003 to 2012 period. In eight of the 10 years studied, the USDA's Canadian crop estimate was below the final Statistics Canada crop estimate. The closest to the actual estimate was in 2012, where the actual production estimated by Statistics Canada came in just .76% above the USDA, while in 2009, the Statistics Canada estimate was 19.78% above the USDA, which proved to be the largest spread between the U.S. estimate and actual production. In the eight years where the crop size was underestimated by the USDA, the average percent change was 7.3%.

The USDA overestimated the Canadian all-wheat crop size in 2006 with the percent change from the USDA to the actual production estimate being minus 2.46% and in 2007 the percent change was minus 1.03%, which were the only two years where the USDA's crop estimate was above Statistics Canada's final production estimate in the 10-year period.

Over the 10-year period, the final official September estimate proved to be higher than the USDA estimate by 5.5% on average. The USDA's most recent August estimate for the Canadian all wheat crop was 29.5 million metric tonnes, while Statistic's Canada's most recent estimate is 30.6 mmt. Today we will see a potential USDA revision to all global crops, including Canada's all-wheat production.

Related to this study is a Bloomberg report which suggests that Statistics Canada is entertaining the notion of eliminating the September yield survey, with producers in favor of the use of satellite imagery to estimate yields and production, starting as soon as fall 2014. While Statistics Canada is seeking to reduce budgets, the rationale is suggested to be focused more on avoiding the survey process that takes place in the busy harvest season.

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

(ES)

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