Canada corn, wheat output raised
Statistics Canada pegged surprisingly large 2013-14 [August/July] production figures for many of the crops grown in the country in their Dec. 4 report.
"There's just no getting around it, this is the biggest crop of Canadian history and it's basically a shocker all around," said Mike Jubinville of ProFarmer Canada in Winnipeg.
"I really can't think of a crop, other than peas and lentils, that didn't provide an upside that betters what trade expectations were."
Perhaps the most surprising figure was the 37.53 million metric ton production estimate for all wheat. Statistics Canada previously estimated that 2013-14 all wheat production would total 33.03 million metric tons. In 2012-13, 27.21 million metric tons were grown.
The canola production estimate of 17.96 million metric tons was at the highest end of expectations, but just as shocking to the trade.
"We would've expected maybe 17 million [metric] tons, and the trader would've just said 'it's bigger than that still'," said Jubinville. "But in this case, it is what it is."
Statistics Canada previously pegged canola production at 15.96 million metric tons for the 2013-14 crop year. There were 13.87 million metric tons of canola grown in Canada last year.
Durum wheat, oats and barley were also above expectations, with even larger-than-anticipated yields behind the increases for all crops.
Because all of the crops are so huge, it won't be possible to move the entire crop this year, Jubinville said.
"We're going to argue all we want about rail car allocations, about slow deliverable opportunities, but there's just no way that the Canadian commercial handling system can move this crop," said Jubinville.
He added that farmers may not be able to deliver some types of wheat until next year now because some grain companies are placing priorities on hard red spring varieties.
Because there just isn't enough capacity to get everything moved this year, there will also likely be larger-than-anticipated carryover stocks of all crops.
For canola, carryout stocks could be larger than 3 million metric tons, Ken Ball of PI Financial in Winnipeg said, adding that previous guesses were in the 1.6 million to 1.8 million metric ton range.
With logistical issues, the huge supplies and large expected carryout figures, prices for most crops will likely drift lower going forward.
"You're seeing basis levels weaken on all crops, but wheat to me is one that is a particular stand out," said Jubinville. "These are probably going to be the widest basis levels that we may see ever."
Canola prices were also taking a hit, with the ICE Futures Canada canola market moving lower in reaction to the surprisingly large production number Wednesday morning.
The following is a quick summary of the Statistics Canada crop production estimates for 2013-14. Pre-report estimates are included for comparison. Production in million metric tons.