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Canada to produce less wheat, but export a higher percentage

 

By MATTHEW D. ERNST

Missouri Correspondent

 

MINNEAPOLIS, Minn. — Canada’s wheat crop production will drop more than 26 percent this year. But the world’s leading wheat exporter will ship more this year, putting pressure on other wheat exporters, including the United States.

Statistics Canada reports a 26.8 percent drop in wheat production for Canada, with both harvested area and average yield declining. Harvested area drops 10.5 percent, at 23.1 million acres; yields are down 18.2 percent, to 43.7 bushels per acre.

The biggest total decline comes from Saskatchewan, which will harvest 27 percent fewer acres at a 19 percent lower yield than last year, according to Statistics Canada.

Canadian farms had plenty of last year’s crop to ship in 2014. "Wheat and canola production are down in Manitoba and Saskatchewan in 2014, but many producers carried over significant bushels from the 2013 production year due to logistical issues," said Aaron Smith, University of Tennessee grain marketing specialist.

These two provinces are sandwiched between two regions with heavy rail transportation demand – the Athabasca oil sands, in northern Alberta, and the Bakken Shale. Both Canadian and U.S. governments responded to complaints of access to rail shipments this year, including last week’s announcement that the U.S. Surface Transportation Board will require weekly rail service reports from the largest rail companies.

Still, Canadian wheat flowed more freely in 2014, with the USDA projecting Canada’s exports at 23.24 million metric tons (mmts) – up from 18.97 mmts the year previous. That volume, combined with higher overall world wheat production, has some analysts challenging a USDA October forecast of increased U.S. wheat exports for this year.

"I have a hard time believing we’re going to really ratchet up wheat export sales right now," said Peter Georgantones, of Roy E. Abbott Futures in Minneapolis.

Manitoba is projected to harvest 34.5 percent less wheat than last year. That is the result of some wheat ground switched to soybeans. Yields for wheat in Manitoba, expected down 5 bushels this year at 32.6, are less than Saskatchewan.

That can make soybeans an attractive alternative for farms in Manitoba, despite the risk of early winter weather. Some Prairie farmers have already experienced snow and hail damage this year.

But Manitoba’s relative shift from wheat to soybeans is not likely to be a staying trend – rather, producers will make their decisions year-to-year.

"The world’s going to plant oilseeds next year at the expense of corn acres," said Georgantones, during comments on the latest USDA production report released Oct. 10.

10/15/2014