Hot weather rescues Canada wheat, after wet spring

Recent heat has prevented another poor Canadian spring sowing season translating into a further drop in wheat production, besides keeping the canola harvest on track to set a record.

Canada will reap a 24.1m-tonne wheat harvest this year, Statistics Canada said, in a report attributed for a sharp reversal in US spring wheat futures.

The estimate beat market expectations of a 23.5m-tonne figure, and meant the harvest would, after all, beat last year’s result, of 23.2m tonnes.

Canada’s farm ministry earlier this month pegged the crop, which mainly comprises spring wheat, at 23.0m tonnes, with the US Department of Agriculture estimating it at 21.5m tonnes.

‘Hot, sunny weather’

In western Canada, the main production region, "farmers reported that recent hot, sunny weather may temper production losses that had been anticipated earlier because of a damp, late spring with persistent wet conditions in many areas", Statistics Canada said.

The comments follow comments on Monday from the Canadian Wheat Board that warm, and fairly dry, conditions had allowed western farmers to harvest 5% of their crops last week, taking the total to 7%.

However, with crops’ development slowed by late planting, following the rain-punctuated spring sowing season, this was still behind the average rate of 12%.

"While farmers in all provinces are harvesting later than average, Alberta’s weather conditions have left it farthest behind," the CWB added.

Canola hopes

Statistics Canada estimated the harvest of canola, the rapeseed variant, rising 11.1% to an all-time high of 13.2m tonnes.

"This would be the result of a record area to be harvested of 17.8m acres and a strong yield of 32.3 bushels per acre," StatsCan said.

This harvest estimate was ahead of the USDA forecast, of 12.6m tonnes, but behind that of Canada’s farm ministry, which had pegged the crop at 13.4m tonnes.

‘Eyes on quality’

The data were termed by US Commodities, the Iowa-based broker, as "negative" for wheat futures, and "neutral" for canola.

Canola for November delivery closed 0.5% higher at Can$562.10 a tonne in Winnipeg.

However, in Minneapolis, where US spring wheat is traded, the September lot slumped 2.6% to $9.26 a bushel.

The StatsCan data signal that "world wheat supplies are growing a little more than USDA projected last month," Darrell Holaday at US broker Country Futures said.

"This has kept the wheat market at bay somewhat today."

In the UK, the grain arm of a major commodities house said that the data could have implications on the debate on global supplies of high quality grain, which have been put into question by a disappointing US crop and rain damage to the German harvest.

"This figure is important for the direction of the milling wheat market going forward as Canadian wheat is predominantly spring milling wheat. So all eyes on what quality they get," the merchant said.

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