MARKET DEVELOPMENT
03-07-2001
Canada canola plantings seen lowest in five years
Canada canola plantings seen lowest in five yearsWINNIPEG, Manitoba, June 29 (Reuters) - Canada's farmers will plant thesmallest canola acreage since 1996, a widely watched government surveyreported on Friday, but the planted area was still higher than industryexpectations."It's a little higher than the trade was anticipating, but I think it's agood number," a Winnipeg-based grain company analyst said. "It's verypositive because it gives us something to work with.""It's kind of like newfound money," a floor trader at the WinnipegCommodity Exchange said. "All of a sudden things aren't as tight as theyonce were and now you can kind of trade a little more freely."The Statistics Canada report said canola plantings this year would drop to9.93 million acres, down 18 percent from the 12.09 million acres seededlast year but above industry estimates of 8.9 million to 9.45 millionacres. The survey figures were also higher than an earlier Statscanplanting estimate of 9.27 million acres released in April."Unprofitable margins for canola crushers, near-record stocks of canolathis spring and high input costs for fertilizer and chemicals were themain deterrents," Canada's statistics agency said in its preliminaryestimates of principal field crops areas.Canola is the Canadian variant of rapeseed. Canada produces 20 percent ofthe global supply and is the world's largest exporter of the oilseed.According to the Canadian Grain Commission, Canada has exported 4.37million tonnes of canola so far in the current 2000/01 crop year, a jumpfrom the 3.57 million tonnes exported during the same period the yearbefore.Canada's major canola buyers are Japan, China and Mexico.Last year Canada's 12.09 million canola acres produced 7.1 million tonnesof the oilseed. Using the latest acreage estimates, some analysts said anaverage yield this year could produce about 5.4 million tonnes."Longer-term, it's still a very friendly number. We barely have enough togo around," an industry analyst said.Analysts said that given extremely dry conditions in Alberta and parts ofSaskatchewan earlier in the spring and excess rain in Manitoba, attentionwould now shift to crop weather and yield, something that Statscan alsoacknowledged, stating that some farmers were "ambivalent" about whetherthey would have a crop to harvest.One of the major surprises in the Statscan report was a decrease in barleyacres."The barley area drop is surprising and mystifying," said Bruce Burnett,director of weather and crop surveillance at the Canadian Wheat Board.The Statscan survey said 12.4 million acres of barley would be seeded inCanada, down from 12.55 million last year. Grain traders had expectedbarley plantings of 12.5 million to 13 million acres.Much of Canada's grain industry had forecast that canola acres would betransferred into barley because it is a more drought-resistant andlower-cost crop."Obviously for the later planted stuff that went in, they decided to givecanola a whirl," Burnett said.The Statscan survey revealed that hundreds of thousands of acres had goneinstead to specialty crops such as peas, oats and chickpeas.Dry pea acreage climbed to a record 3.6 million acres, 16 percent higherthan the 3.1 million acres seeded last year, an increase Statscanattributed to lower fertilizer costs and the growing use of peas in animalrations and for export.Canada's all-wheat seedings came in at 28.497 million acres, aboveindustry expectations of 26.55 million to 27.5 million acres and higherthan last year's 27.583 million acres.In April, Statistics Canada forecast 27.28 million acres.The largest increase was in spring wheat, the statistics agency said,jumping to 21.96 million acres from 20.06 million acres in 2000."I look at the wheat numbers in Canada as being kind of ugly," a Winnipeggrain broker said."In the last report, it all said a lot of those canola acres would go intosummer fallow," an analyst said. "Well, it turns out they didn't. Theywent into wheat."The report forecast that durum wheat would decline to 5.54 million acresfrom 6.53 million last year and within trade expectations that had rangedfrom 5.3 million to 7.05 million acres. Statscan's April planting estimatefor durum was 5.31 million acres.Additional acres were seen for flax, Canada's other oilseed crop. Friday'sreport forecast 1.635 million flax acres, up from 1.47 million acres in2000.Statistics Canada will release its crop production estimates on August 28.
