The U.S. ag attache in Canada says total production of wheat, barley, oats and corn is forecast to fall 20% in 2014 from last year's record crop to 52 MMT. The attache says large supplies and a weaker Canadian dollar, combined with strong world demand, should keep exports above average levels in 2014-15.
"The record breaking grains and oilseed crop in 2013 will have a carryover effect into planting decisions for 2014-15," says the attache. "Carryover stocks that are significantly higher than average, strategic decisions on which crops will bring in the most revenue, and transportation costs will be critical factors in planting decisions."
Specifically, the attache expects 2014-15 wheat area to decline by 12% from last year for a crop of 27 MMT, which would be down 27% from 2013-14. Barley production is forecast at 8.7 MMT, a 15% decline from 2013-14.
The attache says record 2013-14 grain production has put a strain on the grain handling and transportation system. "A weaker-than-expected economic performance in 2013 compared with the United States and falling crude oil prices has weakened the Canadian dollar against the U.S. dollar. With most major banks forecasting the Canadian dollar in the 90 cents U.S. range for 2014 and into 2015, this will help boost Canadian grain exports. How much Canada will be able to leverage the high grain supplies and the weaker Canadian dollar will depend on Canada’s grain handling and transportation system’s ability to get the grains to the ports and out to the export markets," says the attache.