Astonishing Canadian crop production in 2015
By Brennan Turner, President/ CEO FarmLead
Statistics Canada came out on Friday, December 4 with another whopper of a production report, blasting away market expectations by pegging this year’s Canadian canola crop at 17.2 million tonnes, (an increase of almost 4 per cent from last year and the second largest on record after 2013’s monster). The market was expecting a number around 15.6 million tonnes, but that number got trumped by average yields in Western Canada climbing 9 per cent year-over-year.
Thanks to the fact that most of the private market expecting a higher number, strong soy-oil prices, and a weak Canadian Loonie, the market rebounded from short-term losses. Total wheat production was pegged at 27.6 million tonnes, again well above the 26.7 million guess-timated ahead of the report, but smaller than 2014’s 29.4 million tonne crop. This included almost 20 million tonnes of spring wheat and 5.4 million tonnes of durum, which is almost 15 per cent higher than the five-year average production number. The Canadian soybean crop was bigger for the seventh consecutive year at 6.2 million tonnes while corn production was up 18 per cent year-over-year to 13.6 million tonnes, thanks to a record average yield of 170 bu/ac in Ontario.
Barley production in Canada was also bigger at 8.2 million tonnes versus the 7.6 million expected and 7.1 million produced in 2014, but that’s generally in line with the five-year average production number. As for the pulse and specialty crops, most results came in line with pre-report estimates with 942,000 MT of flax (+8 per cent year-over-year, +62 per cent from the five-year average), 3.2 million tonnes of peas (-16 per cent YoY and -4 per cent from the five-year), 2.4 million tonnes of lentils (+19.4 per cent YoY and 26.7 per cent from the five-year and you can probably expect that number to climb in 2016).
For the mustard crop, 123,000 MT was taken off (-37 per cent YoY, -21.2 per cent from the average), 84,000 MT of chickpeas were harvested (-32 per cent YoY and -37.5 per cent from the five-year average but that’ll likely be made up by the aforementioned Aussie crop), and 149,000 MT of canaryseed (+19 per cent YoY and +8 per cent from the five-year average).
While the StatsCan could be generally construed as bearish, the weakness of the Canadian Loonie is making the exportability of Canadian grain much more affordable. That being said, it has been suggested that Canadian wheat exports may top those of the United States, which would make it the number two exporter in the world, behind only Russia.
Speaking of competitiveness, the U.S.D.A. came out their first forecast for the 2016 U.S. crop, pegging corn acres at 90.5 million acres, up 2.4 per cent year-over-year (and the first increase in three years). With that sort of acreage, the strength of the U.S. dollar, and more South American products hitting the market, some analysts have even suggested corn prices below $3/bu in the next year isn’t out of the realm of possibilities (the U.S.D.A. is predicting $3.60/bu corn in 2016). For soybeans, the U.S.D.A. is expecting the third largest soybean crop of 3.785 Billion bushels, coming off 82 million acres of planted area (-1.4 per cent YoY).
The U.S. 2016 wheat crop was projected at 2.06 billion bushels, coming off 53 million acres, a decline of 6 per cent from 2015 and the lowest US acreage since 1970! Of course, we could be surprised come spring 2016 when the drills hit the dirt and plans have deviated from these expectations.