Blake Duchek’s farm in Saskatchewan was pummeled with as much as 11 inches (28 centimeters) of rain in the span of three days last month, killing crops that were sitting in several inches to a foot of water. He estimates the losses will cost him more than C$500,000 ($468,000).
"It’s a total write-off," said Duchek, a 33-year-old farmer who estimates he’s lost as much as 35 percent of his 5,500 canola and wheat acres near Esterhazy. "It’s a big financial loss."
Widespread flooding after record rainfall is reversing expectations for a bigger crop in Canada, the world’s largest grower, after the government said last month that planting would increase 1.5 percent to 20.2 million acres. Sowings could miss that forecast by as much as 11 percent and output may tumble as much as 10 percent from last year’s all-time high of 18 million metric tons, according to Errol Anderson, the president of ProMarket Wire, a grains newsletter in Calgary.
"What we thought was going to be an abundant amount of canola one year from now just won’t be there," Anderson said in a July 4 telephone interview. Inventories before next year’s harvest "could be half of what we thought," he said.
Tighter supplies for processors could send cash prices for canola as much as C$20 a ton above Winnipeg futures in the next 12 months, Anderson estimates. That compares with a discount of about C$5 on June 27 for grain in Saskatchewan, the latest government data show. Futures for November delivery rose 0.2 percent to C$460.30 a ton today at 10:51 a.m. on ICE Futures Canada in Winnipeg, Manitoba. Prices climbed 2.3 percent this year.
The downpour is also trimming the outlook for wheat and other grains, and as many as 6 million acres of farmland in Manitoba, Alberta and Saskatchewan may be dead or drowned, according to Saskatoon-based Weber Commodities.
Parts of the prairies received record rain since the start of the growing season, and Saskatchewan, the nation’s top wheat and canola producer, has had as much as triple the normal amount in the past month, Martell Crop Projections said in a June 26 report. Fifty-four municipalities in Saskatchewan have declared a state of emergency, Colin King, the province’s deputy commissioner of emergency management and fire safety, said July 2. Manitoba declared a provincial state of emergency on July 4.
The outlook for record soybean acres in the U.S. may limit price gains, as some oilseed consumers substitute for canola. About 84.8 million soybean acres will be sown in the U.S. this year, the most ever and up 11 percent from a year earlier, according to the U.S. Department of Agriculture.