Ag Canada’s Latest Outlook For 2016-17

Ag Canada’s Latest Outlook For 2016-17

on August 14 | in Ag News | by | with No Comments

Market analysts with Agriculture and Agri-Food Canada are forecasting prices to be higher for soybeans, lower for corn and steady for wheat. Of note, the Market Outlook report released on July 18 noted that a sustained rally of soymeal prices since early spring is outweighing bearish factors such as large world carry-out stocks and the potential of another bumper crop.

Report highlights:


Planted area is forecast to rise marginally to 2.2 million hectares as area seeded increases in western Canada relative to eastern Canada. In western Canada, soybean development appears normal to better than normal on support from above average temperatures and adequate to excessive rainfall.

In the east, crop development is near normal with growing conditions continuing dry. Assuming trend yields, soybean production in Canada is forecast at 5.7 Mt, a drop of 18% from 2015-16.

Supply is expected to decrease by about 0.6 Mt due to lower carry-in stocks and lower production. Exports are forecast to fall by 0.4 Mt to 3.8 Mt, as constrained supplies prevent the servicing of steady export demand. Domestic crush is forecast to fall by 0.2 Mt on pressured crush margins and competition from large world soybean oil and meal supplies. Carry-out stocks are expected to remain unchanged at 0.375 Mt in 2015-16.

Soybean prices are forecast to increase from last year to $460 to $500/t. The world outlook for soybean markets has strengthened since early spring as a sustained rally of soymeal prices outweighs the bearish combination of large world carry-out stocks combined with an expected fourth year of bumper crops. The bullish outlook for soybeans is also supported by the USDA’s tightening of world ending stocks for 2016-17 to the lowest level since 2012-13, based mostly on sharply higher expected Chinese soybean crush.


The Chatham corn price is forecast to decrease from 2015-16 due to large supplies, a softer US corn future’s price and a strengthening Canadian dollar.

Carry-in stocks are near record levels at 2.0 Mt. Production is forecast to decrease to 6% to 12.8 Mt due to the only slightly higher area across Canada and the assumption for average yields. Imports are forecast to remain unchanged due to the stable domestic supply. Despite high carry-in stocks, lower production and stable imports will cause total supply to decrease by 1%. Total domestic usage is forecast to increase slightly by 1% due to trend increases in ethanol production, industrial and livestock feeding.

Exports are forecast to decrease to 1.0 Mt due to the strong competition from the major corn exporting countries and a stronger Canadian dollar. Although carry-out stocks are forecast to decrease by 3%, they are expected to remain at record levels and above the previous five and ten-year averages.

The USDA Acreage Report showed US corn planted area to have increased 7% from 2015; this is a slight increase from the March report and was higher than the average industry estimate. This would be the third largest US corn area since 1944 and, assuming trend yields, has the potential to increase corn ending stocks to exceed the 2-billion-bushel mark.

Wheat (excluding durum)

For 2016-17, area seeded in Canada decreased by 7% with a 22% increase for winter wheat being more than offset by a 9% decline for spring wheat; overall, the decline reflects a shift to durum and pulses.

Production is forecast to increase marginally to 22.3 Mt because of higher yields. Supply is expected to fall by 10% as the rise in production is more than offset by lower carry-in stocks. Exports are forecast to fall by 10% to 15.5 Mt because of the lower supply. Carry-out stocks are forecast to fall by 22% to 2.5 Mt.

The average crop year producer price in Canada for wheat is forecast to be the same as for 2015-16 because support from the lower Canadian supply is expected to be offset by a stronger Canadian dollar, the higher US supply and the higher world supply.

US production is forecast to increase by 5.7 Mt to 61.5 Mt, with a 25% increase for hard red winter wheat, a 20% increase for white wheat, a 3% increase for soft red winter wheat and a 9% decrease for hard red spring. Supply is forecast to rise by 12.1 Mt to 91.5 Mt. World all wheat production, including durum, is forecast to increase 4Mt to 738 Mt. Supply is forecast to rise by 31 Mt to 983 Mt.

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