WINNIPEG, Manitoba (Reuters) -- The Canadian Wheat Board lowered its 2010 wheat crop forecast for Western Canada by 2 percent on Friday, slightly deepening concerns about global production.
Farmers in the country's main crop-growing region look to harvest 18.45 million tonnes of all-wheat, the Wheat Board said, down 450,000 tonnes from its June 11 forecast and the smallest wheat crop in three years.
"Farmers are resilient, but when you cannot even get seed into the ground, it's devastating," said Allen Oberg, chairman of the Wheat Board, at the board's annual news conference at the end of the crop year in Winnipeg.
(Graphic: http://link.reuters.com/…)
Record rains across much of Western Canada left 10.5 million unplanted acres, the Wheat Board said. Another 2.5 million planted acres will not harvest a crop due to excess rain damage, the board said.
"A great many farmers are not going to have a good year," said Wheat Board president and chief executive officer Ian White.
The board lowered its crop expectations despite projecting better than average yields, as the extent of the rain damage became more clear since last month and because farmers can't necessarily count on the unusually warm late-summer weather that advanced crops last year, White said.
The CWB sees wheat yielding 38 bushels per acre (1 bushel above average), durum yielding 35.2 bu/acre and barley 58 bu/acre.
Prospects for a smaller Canadian crop helped fuel a spike in nearby Chicago wheat futures in June, with concerns about severe drought in Russia helping in July to push up prices to their biggest monthly percentage gain in 37 years.
Russian drought is a more significant factor than Canadian crop problems on world wheat supplies, White said, but noted that the global crop remains large in any case.
"If you look at the basis in the U.S., you'll see what physical buyers are thinking about those (Minneapolis and Chicago wheat futures) values, which gives you the view that maybe these markets are being driven by a lot of rumor," he said.
The International Grains Council on Thursday cut its global wheat crop forecast by 13 million tonnes to 651 million tonnes due a string of world weather setbacks, but that would still be the third-highest crop on record.
Canada was the world's No. 6 wheat producer last year. However this year's crop problems could see its ranking drop behind Germany and Pakistan to eighth, according to IGC forecasts.
The Wheat Board said on Friday it exported 18.8 million tonnes of grain in 2009/10, the highest volume in 10 years.
It expects exports to fall to about 15.1 million tonnes in 2010/11.
The Wheat Board sees production of durum and barley at 2.9 million tonnes and 7.4 million tonnes respectively, down from June forecasts for 3.16 million tonnes and 7.64 million tonnes.
Western Canada's spring wheat crop may come in with lower than average quality due to fusarium disease, and slightly below average protein levels, said Stuart McMillan, crop and weather analyst at the Wheat Board. Durum quality looks average to above average and barley quality should be slightly above average, McMillan said.
The Wheat Board is one of the world's biggest grain marketers and holds a government-granted monopoly to buy and sell Western Canada's wheat and barley.
(AG)
