Canada Markets

Statistics Canada Updates Acreage Estimates

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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It is a busy day for grain market watchers Tuesday, with Statistics Canada releasing their preliminary estimates of field crop areas report while USDA will later release their Acreage report as well as a Quarterly Stocks report.

Tuesday's StatsCan report was conducted based on data from 24,500 farms between May 28 and June 11, was expanded from the March estimates to include all provinces while also broke down wheat estimates by class.

Canada's all-wheat acres, including durum and surviving winter wheat acres, was reported at 24.142 million acres, below the 24.765 million acres estimated in March but higher than the 23.835 million acres seeded last year. This area was slightly below the range of pre-report estimates conducted by Commodity News Service at 24.2 million to 25.8 million acres. Losses in area seeded to hard red spring wheat, prairie spring wheat, soft white spring wheat and winter wheat were offset by a gain in durum acres.

Durum acres were reported at 5.750 million acres, up 21% or 1 million acres from last year and were just slightly higher than the range of pre-report estimates at 5.3 million to 5.7 million acres. This is the largest area seeded since over 6 million acres were planted in 2008. The 4.950 million acres seeded in Saskatchewan is the also largest area seeded since 2008.

The 19.8 million acres seeded to canola was higher than the 19.416 million acres reported in March, although remains over a half-million acres below the 20.325 million acres seeded in 2014. This area fell within the range of pre-report trades estimate of 19 million to 20.4 million acres, while is also equal to the five-year average.

The estimated area seeded to flax was reported at 1.690 million acres, slightly higher than the March estimate and at the higher end of pre-report trade estimates. This acreage would suggest the largest area seeded to the crop since 2006 and the fourth consecutive annual increase, with this year's Chinese demand a boon for the crop.

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Barley acres were reported at 6.511 million acres, just slightly higher than the March estimate and 10.7% above the record-low acreage seeded in 2014. This fell within the range of pre-report trade estimates of 6.1 million to 6.9 million acres, while remains below the five-year average area of 6.8 million acres and the 10-year average of 8.2 million acres.

Oat acres were reported at 3.403 million acres, 21.6% above 2014, although within pre-report trade estimates of 3.2 million to 3.8 million acres. Although this area is above the five-year average of 3.016 million acres, feed shortages on the prairies are expected to lead to more oats cut for green feed which may lead to tight supplies, especially when combined with the dry conditions faced on the prairies which will negatively affect yield potential.

As widely expected, lentil acres were reported at 3.870 million acres, above the March estimate and also 24% higher than seen in 2014. Growing demand for lentils, which are currently in extremely tight supply on the prairies, has 2015 acres roughly 1 million acres above the five-year average. Acres seeded to dry peas were pegged at 3.705 million acres, slightly below both the March estimate and the seeded area in 2014. This area remains above the five-year average of 3.4 million acres, with a record pace of export movement along with lower input costs making the crop a popular choice. In the past 20 years (1996 to 2015), this is only the second time that lentil acres have exceeded pea acres in western Canada according to Statistics Canada data, while over the same period, pea acres have averaged 1.2 million acres more than lentils.

Soybean acres in Canada were reported at 5.420 million acres, slightly higher than the March estimate but still roughly 142,000 acres lower than estimated for 2014. This acreage would reflect the first drop in acreage seen in eight years, with the estimated acreage roughly 1 million areas above the five-year average. Data released indicates that increases in acreage in Manitoba and Saskatchewan are off-set by losses in Ontario and Quebec.

Corn acres in Canada were reported at 3.2519 million acres, slightly lower than the March estimate but 5.7% higher than the 2014 estimate. While Manitoba seeded its smallest crop in four years, offsetting gains were seen in both Quebec and Ontario. It's interesting to note that a recent DTN 360 Poll asked about the notion of less soybean acres and more corn acres in Canada, the opposite of the expected move made by U.S. farmers, 37% of responses suggested a lack of faith in Statistics Canada data.

Markets will take quick note of Tuesday's data, but weather will continue to be a much larger issue in determining this year's potential output. A hypothetical shift of a million acres of canola at the five-year average yield of 34 bushels per acre has an approximate impact of 771,000 metric tonnes on the balance sheet, while a 5 bpa loss in yield across the entire 19.8 million acres would have a 2.2-million-ton impact on the balance sheet. Weather across North America is and will remain paramount.

At the time of writing, markets remain narrowly mixed ahead of Tuesday's USDA report.

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Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Follow Cliff Jamieson on Twitter @CliffJamieson

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