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AG CANADA FORECASTING RECORD CANADIAN CORN CROP

on November 3 | in Ag News | by | with Comments Off on AG CANADA FORECASTING RECORD CANADIAN CORN CROP

Market analysts at Agriculture and Agri-Food Canada are forecasting corn production to increase 3% to a new record of 14.5 million tonnes (Mt). The prediction for the 2018-19 crop is due to the higher area and higher yields.

According to AAFC, the average Canadian corn yield is expected to be the second highest on record but only slightly higher than in 2017. Canada’s three highest average yields have all occurred in the past four seasons with the record yield being in 2015.

The most recent outlook report, released on Oct. 19, incorporates yield estimates from Statistics Canada’s Sept. 19 report. These yield estimates are based on a model that incorporates coarse resolution satellite data from Stats Can’s Crop Condition Assessment Program, data from the agency’s field crop reporting series, and agroclimatic data.

Corn imports are expected to decrease by 16% to 1.4 Mt. Despite the reduction in carry-in stocks and lower imports, total supply is forecast to increase to the new record level of 18.3 Mt. Total domestic usage is forecast to increase 2% to the new record of 14.3 Mt due to trend increases in ethanol production, industrial use and livestock feeding. Exports are forecast to decrease by 2% due to higher international competition. Carry-out stocks are forecast to decrease by 9% and remain below the previous three-year averages.

Soybeans

Soybean production is estimated at 7.5 Mt, down 0.2 Mt from last year, on a planted and harvested area of 2.56 million hectares (mln ha) and 2.54 mln ha, respectively and yields of 2.76 t/ha.

Total supplies of soybeans are estimated at 8.6 Mt, virtually unchanged from last year as higher carry-in stocks, at 0.65 Mt, offset the decrease in output. Imports are forecast at 0.4 Mt, down slightly from last year. Early in the crop year, U.S. export sales of soybeans to Canada, as reported by the USDA, are up from 2017-18 but only to a level needed to supply Canadian processors. AAFC continues to monitor the U.S. situation closely.

Exports are forecast at a record 5.7 Mt with shipments headed to a diverse group of countries. The discount of the Canadian dollar to its American counterpart is expected to support Canadian shipments against competition from burdensome world soybean supplies, especially in the U.S. and Brazil.

Domestic processing of Canadian soybeans is forecast at 1.9 Mt, slightly under 2017-18 levels. Carry out stocks are forecast to fall by 0.2 Mt to 0.45 Mt, for a stocks-to-use ratio of about 6%.

Soybean prices are forecast to decrease to $380-420/tonne under pressure from the bumper U.S. crop and uncertainty over the stability of U.S.-Chinese trade.

Wheat

For 2018-19, Canadian wheat production is estimated by Statistics Canada to increase by 1% from 2017-18 to 25.3 Mt as an 8% increase in seeded area was mostly offset by lower yields, resulting from below normal precipitation in most wheat growing areas. The production estimate is 1.35 Mt higher than Stats Can’s survey-based estimate. Wheat harvest progress in the northern Prairies has been delayed by wet weather and a significant portion of the crop remains to be harvested.

Total supply is estimated to decrease marginally because of lower carry-in stocks. Exports are forecast to rise by 3% because of strong demand for wheat in world markets and less competition from Australia, Russia and Ukraine.

The average crop year prices of wheat in Canada for 2018-19 are forecast to increase from 2017-18 because of the lower world supply and strong export demand. However, protein premiums are lower than for 2017-18 because the protein content for U.S. hard red winter wheat is higher and the production for U.S. hard red spring wheat has increased. Prices have fallen slightly from the start of the crop year.

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