Canadian farmers intend to exploit better planting conditions this year to sow even more wheat than anticipated – but to cut back on oilseed seedings, including an unexpectedly large drop in canola area.
Statistics Canada, after a survey of farmers, estimated that Canadian farmers will plant 74.4m acres with major crops, up 1.3m acres from last year, when a cold and wet spring forced farmers to leave some fields unsown.
“According to industry reports, seeding conditions are seen to be favourable overall, after two years of late seedings,” StatsCan said.
The extra area will be support an even bigger increase in wheat sowings than investors had forecast, with seedings seen at 24.8m acres, a gain of 3.9% year on year, twice the increase that the market had expected.
Sowings expectations for durum wheat, the type used in pasta, were particularly strong, seen soaring 15.8% to a six-year high of 5.50m acres, supported by elevated world prices of the grain after a rain-hit harvest in many major growing areas last year.
Canola out of favour
However, plantings of canola, the rapeseed variant, were pegged at 19.4m acres, a drop of 4.5% year on year.
The forecast was well below market expectations of Canadian canola plantings of 20.2m acres, down only some 130,000 acres year on year.
AAFC, the Canadian farm ministry, had pencilled in a rise in sowings to nearly 20.8m acres, citing “competitive prices” to grain crops, and expectations of an early start to plantings, which are beneficial for a crop which tends to produce higher yields if it flowers before the summer heat.
StatsCan forecast a drop in Canadian soybean plants too, by some 200,000 acres to 5.4m acres – well below investor estimates of 6.0m acres in sowings.
The data spurred a recovery in Winnipeg canola futures from early losses, with the July contract standing at Can$455.00 a tonne in late morning deals, up 0.8% on the day.
Minneapolis-traded hard red spring wheat retreated from earlier highs, reached after some strong US export sales data for last week, showing orders of spring wheat rising 10-fold week on week to 129,000 tonnes.
But they remained in positive territory, up 0.4% at $5.57 ѕ a bushel for July delivery.
Terry Reilly at Chicago broker Futures International also highlighted as “supportive for feed grain” prices a StatsCan estimate for Canadian barley sowings of 6.48m acres this year.
While up 10.2% year on year, the figure was more than 200,000 acres short of forecasts.
(Source – http://www.agrimoney.com/news/canada-farmers-to-lift-wheat-area-but-spurn-canola–8248.html)