The “dramatic increase” in Canada’s crop production this season will rebuild its wheat stocks to a five-year high, officials said, upping their inventory forecasts for the likes of oats and canola too, while cutting price forecasts.
AAFC, Canada’s farm ministry, downgraded 2022-23 price expectations for a range of major crops, including durum wheat, for which the estimate, as measured by farmgate values in top growing province of Saskatchewan, was reduced by Can$25 a tonne to Can$425 a tonne – a drop of one-third year on year.
For other types of wheat, in the main spring wheat, the forecasts for averages 2022-23 Saskatchewan prices was downgraded by Can$15 to Can$400 per tonne, a drop of 10.5% year on year.
The forecast for oat prices, as measured by season-average Chicago futures values, was slashed by Can$75 per tonne to Can$360 per tonne, down 36% from last season.
“The average price is predicted to fall sharply from the record level in 2021-22 to $360 per tonne, due to an expected supply rebound in North America,” AAFC said, although adding that this value remained “historically high”.
In the oilseeds sector, the forecast for the canola price, as measured in Vancouver, was downgraded by Can$35 per tonne to Can$865 per tonne, taking it 19.5% below last year’s record high.
‘Rebound in supply’
The downgrades reflected increased supply expectations, as the ministry absorbed Statistics Canada data earlier this month estimating that the harvest of many crops would beat earlier forecasts.
“Despite record low carry-in stocks, the dramatic increase in production is expected to lead to a rebound in supply,” AAFC said.
For wheat, the ministry raised its forecast for Canada’s stocks at the close of 2022-23 by 400,000 tonnes to 6.30m tonnes – up by 72% year on year to the highest since 2017-18.
The uplift to the stocks estimate all attributed to non-durum wheat, a category including the country’s important spring wheat crop. Non-durum inventories will reach an eight-year high of 5.40m tonnes.
The forecast for Canada’s carryout oat stocks from 2022-23 was lifted by 100,000 tonnes to 700,000 tonnes, up by 120% year on year, reflecting the rebuild in inventories to a “comfortable level”.
AAFC cited the Statistics Canada estimate of “this year’s Canadian oat production at 4.65m tonnes, 66% and 21%, respectively, higher than last year’s record low and the pre-2021 five-year average”.
Meanwhile, for canola, the ministry raised its end-season inventory estimate by 50,000 tonnes to 500,000 tonnes, although this would remain the lowest in 25 years.
While estimates for this year’s harvest had increased, by nearly 700,000 tonnes, “usage of Canadian canola is forecast to recover” too, with the ministry pencilling in exports “up by about 77% to 9.3m tonnes while domestic crush rises to 10.0m tonnes versus 8.6m tonnes last year”.
The comments come when harvest is well advanced in the top Prairie growing provinces of Alberta, Manitoba and Saskatchewan.
As of last Tuesday, harvesting was 77% completed in Alberta – with less than 5% of durum and 13% of spring wheat yet to get in the barn, although with the canola harvest only a little over half way through.
In Manitoba, overall progress had reached 40%, including a 65% figure for spring wheat and 24% for canola.
Saskatchewan officials estimated progress in the top grain-growing province as of a week ago at 73%, including a 94% figure for durum, 77% for spring wheat and 52% for canola.
Results have generally been reported as good, although there have been some reports of disappointing canola yields thanks to flea beetle attacks on earlier-seeded crops.
Some commentators also believe that the durum crop may prove lower than the 6.12m tonnes that the government is factoring in, given ideas that the average yield in Saskatchewan, where more than three-quarters of Canada’s crop is grown, will fall short of the 38.4 bushels per acre estimated by Statistics Canada.
Mercantile Consulting Venture, noting that Saskatchewan provincial officials foresee a yield of 30 bushels per acre, forecast a 5.9m-tonne durum harvest.
In Alberta, meanwhile, provincial officials reported that the durum was, on quality, the “notable exception” to a generally high-rating harvest.
Alberta durum had suffered a “quality downgrade relative to normal, as 12% more than normal of the total provincial crop is expected at 2 CW grade”, rather than the top 1 CW grade which requires specifications including at least 9.5% protein and a minimum test weight of 79 kilogrammes per hectolitre.