Canada Markets

Today's Ontario Ministry of Agriculture, Food and Rural Affairs Field Crop Report as of August 31 shows an improved moisture situation across regions of the province in the month of August. The nine locations listed in their Weather Summary have received between 57.8% and 110% of their respective 30-year moisture accumulation in the May 1 through Aug. 30 period. The average across the nine locations is 87.6% of the 30-year average, a stark improvement from the 62.4% average reported on July 27.

Have the August rains changed the outlook for Ontario row crops? A recent crop tour of the province conducted by Farms.com reported estimated yields for the province today based on a reported 891 sample points. Estimated yield for soybeans was reported at 43 bushels per acre, up from the recently released 41.6 bpa estimate from Statistics Canada based on producer surveys conducted in July and early August. This suggests that August rains may be boosting the potential for the crop, which is the key month for yield determination.

The same tour reported an estimated yield of 149 bpa for the province's corn crop, which would be down sharply from the record 170.6 bpa achieved in 2015 and below the 153. 5 bpa estimated by Statistics Canada. There is no question the hot, dry weather experienced this summer during reproductive stages of the crop hurt crop potential, but the question is to what degree? DTN contributor and southern Ontario farmer Phil Shaw is sticking to his 145 bpa estimate for the crop.

The attached chart shows the five-year trend in provincial production estimates for corn and soybeans (blue bars and brown bars respectively) including the recently released July 2016 crop estimates. The Statistics Canada estimate for corn production (blue bars) would suggest production at 7.859 million metric tons for 2016, below the 8.840 mmt produced in 2015 and the five-year average of 8.353 mmt. Utilizing Statistics Canada's harvest acre estimates, estimated production based on today's crop tour results would be lower at 7.626 mmt (green bar), while the lower 145 bpa yield estimate (not shown) would lead to a crop size of 7.4 mmt which would be a seven-year low.

Today's AAFC supply and demand estimates based on Statistics Canada data shows the 2015/16 corn carryout at a near record 1.950 mmt, with expected ending stocks to fall by 33% to 1.3 mmt in 2016/17 which would be the lowest stocks seen since 2010/11. This could represent the higher end of stocks estimates.

The current 2016 Statistics Canada estimate for soybean production in Ontario is 3.054 mmt (brown bar), which is a five-year low, below the 3.593 mmt estimate for 2015 as well as the 3.443 mmt five-year average. Based on Statistics Canada's harvested acre estimates and today's higher crop tour yield estimate, production would be slightly higher at 3.154 mmt.

Today's AAFC estimates based on Statistics Canada data shows both domestic crush and exports of soybeans expected to be lower in the upcoming year with ending stocks expected to remain unchanged over the upcoming crop year at 335,000 mt. Any increase in production realized over and above current government projections will be readily consumed by exports or crush while ending stocks should remain tight over the upcoming crop year.

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DTN 360 Poll

This week's poll asks what stands out to you the most in the recent Statistics Canada production estimates. You can weigh in on this week's poll which is found at the lower-right side of your DTN Home Page.

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

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