Canada trimmed forecasts for domestic crop prices, citing improved harvest prospects, although cautioning that “timely rains will still be needed” to realise production hopes.
AAFC, Canada’s farm ministry, lowered by Can$20 per tonne to Can$430 per tonne its forecast for average spring wheat prices in 2022-23, as starts next month, ditching expectations of an increase from the record Can$445 per tonne expected for this season.
For canola, the forecast for average 2022-23 prices, as measured in Vancouver, was cut by Can$50 per tonne to $950 per tonne, with forecasts for domestic barley and corn prices, and oat values as measured by Chicago futures, downgraded too to incorporate deeper year-on-year falls.
“Crop prices, in general, are forecast to remain strong in 2022-23, although decreasing from the record to near-record highs of 2021-22,” the ministry said.
The revisions came as AAFC lifted production forecasts for many crops, with the estimate for Canada’s wheat harvest this year upgraded by 626,000 tonnes to 33.72m tonnes – the third largest on record.
The output upgrade reflected an increased area figure, following results earlier this month of a Statistics Canada survey of growers, besides “assuming a return to average yields” from last year’s drought-affected levels.
For canola, the harvest forecast was lifted by 450,000 tonnes to 18.40m tonnes, also incorporating a larger sowings figure, while for barley and corn, the ministry cut area expectations but lifted yield hopes.
For both corn, for which the harvest estimate was nudged higher by 90,000 tonnes to 14.40m tonnes, and barley, for which the harvest forecast was cut by 244,000 tonnes to 9.06m tonnes, AAFC flagged “higher-than-average yield potential”.
Indeed, overall “crop conditions to the end of June are favourable in the western Prairies and improving in the eastern Prairies after a slow start due to planting delays”, with the Prairies provinces of Alberta, Manitoba and Saskatchewan being Canada’s core crop-producing region.
However, the ministry highlighted too that “timely rains will still be needed over the rest of the growing season to reach average production”.
In both Alberta and Saskatchewan, “some dry conditions still persist… and precipitation will be needed to help crop development”, AAFC said, thinking in particular of durum wheat.
Last week, provincial ag officials in Saskatchewan said that “many producers are reporting that their crops have experienced heat blasting and are worried about the effect it will have on their yields.
“Canola across the province has suffered from the heat and humidity.”
Separately, the US Department of Agriculture’s Ottawa bureau overnight pegged at 33.50m tonnes Canada’s wheat production this year, in line with the AAFC figure.
The bureau was, however, more upbeat on Canadian wheat exports in 2022-23, seeing them at 24.0m tonnes, compared with an AAFC forecast of 22.40m tonnes.
“Canadian exporters will likely benefit from tighter global export supplies and subsequent increased demand for Canadian grains,” the bureau said.
It added nonetheless that “price-sensitive countries”, such as Bangladesh, Indonesia, and the Philippines, “that blend high-protein Canadian wheat with lower-protein wheat from Ukraine, Russia, India and other countries, to produce a desired product, may reduce their purchases of Canada’s higher-priced wheat”.