As found in the USDA's Oilseeds: World Markets and Trade, the agency's estimate for Canadian canola production was trimmed this month by 600,000 mt to what would be a record 19.9 million metric tons. This is well-above the recently released Statistics Canada July estimate that points to an 18.2 mmt crop estimate and compares to the 18.4 mmt produced in 2016. The 19.9 mmt estimate is close to the highest volume shown in the range of pre-report estimates discussed ahead of the release of Statistics Canada's July estimates on August 31.
In three of the last five years (2012-2016), the USDA has estimated a larger Canadian canola crop than Statics Canada in its September estimates, relative to Statistics Canada's July estimates released in late August. The average USDA estimate over the past five years was 426,000 metric tons higher than Statistics Canada. A closer look shows that USDA estimates in September are either slightly lower than reported by Statistics Canada, as they were in two of the past five years, or significantly higher, averaging roughly 728,000 mt higher than Statistics Canada over three of the past five years where the USDA came in higher. The current 1.697 mmt spread seen in the latest estimates released for 2017 is by far the largest, with the differential calculated at 976,000 mt this time last year.
Given that Statistics Canada's final November estimates released in December are typically higher than estimated in July, the USDA has been closer to estimating final production over the past five years with its tendency towards higher production estimates. In total, over the past five years, the USDA has underestimated Canadian canola production by 10.3 mmt (comparing September estimates to Statistics Canada's final estimates including all prior-year adjustments), while Statistics Canada's July estimates have understated total production over the past five years by 12.4 mmt.
The USDA also left its Canadian all-wheat production estimate unchanged at 26.5 mmt this month, which compares to the recent Statistics Canada July estimate of 25.541 mmt. In four of the past five years, the USDA has released a larger all-wheat estimate in September than Statistics Canada's late-August release of July estimates. Across the five-year period, the average USDA estimate was 321,600 mt higher than Statistics Canada, while over the four years that the USDA estimate was higher, the average was 405,250 mt higher. The current differential of 959,000 mt (26.5 mmt versus 25.541 mmt) is the largest seen across the five years looked at.
Given that the final December estimates of Canadian production are also typically higher than the July estimates, as they were in four of the past five years, the USDA's higher estimates in September also land closer to final production estimates. Over the past five years, Statistics Canada July estimates have understated total production by 13 mmt in total, while USDA estimates understated production by 11.5 mmt.
DTN 360 Poll
This week's poll asks what you think of the two latest Statistics Canada reports. You can weigh in with your thoughts on this week's poll, which is found at the lower right side of your DTN Canada Home Page. We thank you for your input!
Cliff Jamieson can be reached at email@example.com
Follow Cliff Jamieson on Twitter @CliffJamieson
© Copyright 2017 DTN/The Progressive Farmer. All rights reserved.