Late-summer moisture has led to improved prospects for crops in many areas of the Prairies. Statistics Canada will release its first crop production estimates for the 2015/16 crop year Friday, with a pre-report debate suggesting that 1) crop data will show stark improvement from levels suggested earlier in the summer and 2) the crop's potential may be even better that we will see in this week's data as late rains have continued to improve the crop potential since the late-July surveys were conducted.
For comparison purposes, the mid-point of the range of pre-report estimates compiled by Commodity News Service was plotted against 2014 production, as well as the five-year average on today's attached graphic.
While most crops are expected to result in lower production levels than last year, Canada's two largest crops are expected to show the largest year-over-year drops in production. The mid-point of the range of canola estimates of 12.5 million tons to 14.5 mmt, which is 13.5 mmt, would indicated the largest year-over-year percentage drop in production of 13.2% and would be roughly 1.5 mmt below the five-year average production level. Weakening canola spreads through the crop year in today's trade, with the Nov/Jan and the Jan/March barely holding in inverted territory, suggest a waning bullish sentiment with the potential for the crop to be much better than earlier forecast.
The mid-point of the range of pre-report estimates for all-wheat of 25.95 mmt would be 11.4% below 2014 production and 2.6 mmt below the five-year average production.
Two crops surveyed in the pre-report estimates would suggest higher 2015 production than last year as well as the five-year average. The mid-point of the range of estimates for flax production is 1.03 mmt, 21.6% higher than 2015 and 455,000 mt above the five-year average. As well, the mid-point of the oat production forecast is calculated at 3.243 mmt, 11.5% higher than the volume produced in 2014 and 196,000 mt higher than the five-year average.
With stocks of many grains in Canada already forecast at tight levels for 2015/16, this report will be watched closely, although the data may be discarded quickly given the continued rains in August which have resulted in continued improvements in many of the late-seeded crops.
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