Drought Cuts Canadian Wheat and Canola Yields

August 21, 2015 11:20 AM

Production of wheat and canola in Canada will continue to fall from 2013 levels. According to a recent Stats Canada crop survey, extremely dry fields in Alberta and Saskatchewan have cut into yield potential of both crops.

Average Wheat Yields Fall

Stats Canada’s Production of Principal Field Crops report, released Friday, Aug. 21, puts projected total wheat production in Canada at 24.6 million metric tons, which is 15.9% less than 2014 output and well below 2013’s 37.5 million metric ton harvest.

“The average estimate for wheat production prior to the report was 25.6 million metric tons, so it was a bit of a surprise,” says Brian Voth, with Agri-Trend Marketing in Red Deer, Alberta, Canada. He and Wayne Palmer, also with Agri-Trend Marketing, were commentators on a post-report MGEX press call.

“Wheat ending stocks in Canada will be relatively tight for the first time in the last couple of years,” Voth says.

Stats Canada lowered its projected Canadian average wheat yield to 38.1 bu. per acre, which is 17.2% smaller than last year’s 46 bu. per acre.

Producers in Alberta and Saskatchewan are facing much smaller wheat crops. Alberta farmers anticipate a 23.6% decline in wheat production to 7.1 million metric tons due to a 23.6%  drop in projected average yield of 39.5 bu. per acre. Saskatchewan farmers anticipate production to plunge 20.8% to 11.2 million metric tons, due primarily to a 23.6% drop in average yield to 39.5 bu. per acre.

Canola Yields Down Double-Digits

Canola yields in Canada have also suffered. Canadian farmers anticipate producing 13.3 million metric tons of canola in 2015, down 14.2% from 2014, mostly the result of a 12.8% decrease in average yield to 30 bu. per acre.

“As far as canola is concerned, this report had no surprises,” Palmer says. “It is very dull compared to the recent USDA (World Agricultural Supply and Demand Estimates) report.”

Palmer also thinks that final production and yield numbers on canola could be higher than this report suggests. Since the Aug. 1 poll, he says, weather has been ideal.

“Now we want to see what is going to happen in the United States,” notes Palmer. “End users are waiting for bargains.”

Canola will follow U.S. soybean prices, he adds, and with end users waiting for lower U.S. corn and soybean prices, canola futures in Canada were mostly flat following the report.

Canola production is projected to drop 27.2% in Alberta, as average yields fall 21.6% to 29.4 bushels per acre. In Saskatchewan, canola production is expected to fall 12.4% to 6.7 million metric tons, due mainly to a 12.1% decrease in average yield to 28.4 bu. per acre.

Corn and Beans Mixed

For the first time since 2007, Canadian soybean production is expected to decrease in 2015. Anticipated production is reported at 5.9 million metric tons, down 3.2% from 2014.

Corn for grain production is projected to increase 7.2% to 12.3 million metric tons, which is 13.3% below 2013’s record-high of 14.2 million metric tons.



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