Statistics Canada released its updated acreage estimates to Canadian crops this morning, based on farm surveys conducted up until June 10. There will be continued debate surrounding abandoned acres in areas of the Prairies due to excessive rainfall this June, while some acres have also been lost due to flooding in low lying areas. The CWB has suggested that lost acres on the Prairies will be approximately 2 million acres, leaving today's report likely overstated.
As expected, producers scaled back seeded acres of cereal grains. There may be many reasons for this. Yesterday, Bloomberg reported data from the International Grains Council which indicated that ending stocks for global cereals in 2014/15 (wheat, corn, barley, oats) are expected to jump to 412 mmt, a 15-year high. Canadian producers are simply reacting to market signals. Poor movement of crops such as wheat and oats over the past winter has also discouraged producers, while the wet and late spring experienced has shifted acres away from corn in some areas and into shorter season crops such as soybeans.
Canada's all-wheat acreage was reported at 24.087 million acres, below the 24.936 ma reported in March and 7.4% below 2013. This acreage was well within the range of pre-report trade estimates released by Commodity News Service. While spring wheat acres were just higher than the range of pre-report estimates, the 17.636 ma reported were well below the March estimate and also 7.4% below year-ago levels. Durum acreage was within trade estimates at 4.8 ma, just 35,000 acres below the March estimate and 3.3% below 2013.
At 6.089 ma, barley acres are a surprise and below the 6.2 to 6.5 ma estimate of trade participants. This is 221,000 acres below the March report and 14% below last year, yet another record low for Canadian barley acres. This acreage is apt to be questioned, as the wet weather experienced in June may have resulted in a late push into barley acres where possible.
Oat acres reported were at the lower end of expectations, below the March estimate and 3.8% below last year. Disappointing movement into U.S. markets over this past winter may have soured many producers, while current reports suggest that rail movement into the U.S. continues to remain a challenge. U.S. oat futures reached $6.00 this winter while Canadian producers faced difficulty getting a bid for their production. Oat acres are reported at 3.046 ma and continue to remain above the record low reached in 2012 at 2.879 ma.
Canadian corn acres were reported to have plunged 15.5% to 3.119 ma. Lower price prospects combined with the difficult spring which forced acres out of corn were behind the move. Manitoba's corn acres were estimated at 300,000 acres in March although was lowered 10,000 acres to 290,000 acres, close to a 24% reduction from 2013. Ontario's corn acreage is reported at 1.885 million acres, a 15% drop from 2013 and the lowest acres planted since 2010.
Soybean acres in Canada are suggested to have increased for the seventh consecutive year to 5.583 ma, a 23.5% jump from 2013. All major producing provinces are showing a year/year increase, with Quebec up 19.6%, Ontario up 21.6%, Manitoba up 23.8% and Saskatchewan reported to have increased their smaller acreage by 76%. Ontario's acreage is set to surpass 3 million acres for the first time in 2014, at 3.04 mmt, while Saskatchewan's acreage of 300,000 is only the second year that this province's acres have been reported.
Pre-report trade estimates suggested that canola acres would range anywhere from one million acres below last year to one million acres above last year's acreage. Today's report suggested that canola acres, at 20.228 ma, would be higher than estimated in March while 1.5% above 2013 levels. This is consistent with a previous Canada Markets column which suggested that on average over the past five years, Statistics Canada tends to under-estimate canola acres in March in relation to the numbers presented in June, although, at the same time, weather conditions will have limited producers' actual ability to get some acres planted.
Flax acres reported were slightly below trade estimates, but still a whopping 51.7% above year ago levels at 1.570 ma, which would be the largest planted acreage since 2009. Modest jumps reported in Manitoba and Alberta is reported alongside a 57% jump in Saskatchewan, where an almost full recovery has taken place back to 2009 levels.
Besides the shift to oilseeds, the other story this year is increased interest in pulse crops. Pea acres were announced unchanged from the March estimate while also equaling trade expectations at 3.975 ma, 21% above year-ago levels. Interest in the crop is growing in Alberta, where acres are suggested to increase 30% over year-ago levels, while the largest producing province of Saskatchewan is set to see acres increase 17%.
Lentil acreage is reported to have jumped 35.4% to 3.240 ma, also well above the March estimate. This would be the highest acreage seen since 2010, when the record acreage of 3.445 ma was achieved. Alberta's small acreage is set to increase 44.6% over 2013 to 120,000 acres while the lion's share is produced in Saskatchewan, where a 35% jump is expected.
Debate will rage on over how many acres were not seeded in June because of challenging weather, along with how many low-lying acres were lost to flooding. Summerfallow acres were reported at a record low of 3.370 million acres in March, while were increased only 80,000 acres to 3.450 in this report. This number does not capture the extent of the acres lost this spring.
Cliff Jamieson can be reached at firstname.lastname@example.org
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