Wheat crop to be second-largest on record, StatsCan predicts

MarketsFarm — Canada’s farmers will have grown their second-largest wheat crop on record in 2020, according to the first production estimates of the year from Statistics Canada, as released Monday.

The government agency pegged total wheat production in the country for 2020-21 at 35.74 million tonnes, up 10.5 per cent on the year and second only to the 37.59 million-tonne wheat crop grown in 2013, according to data going back to 1908.

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The data was compiled using satellite imagery and model-based yield estimates, instead of the usual farmer survey, in an effort to “alleviate stress on farmers during the COVID-19 pandemic.”

Of the wheat total, durum was pegged at 6.93 million tonnes, which would be up by about two million tonnes on the year. Other spring wheat was only up slightly on the year, at a projected 25.96 million tonnes.

The large durum number would normally be considered bearish for prices, but “the demand side is strong, which may hold us up here,” analyst Mike Jubinville of MarketsFarm Pro said.

Canola production was estimated at 19.4 million tonnes, which compares with a revised reading of 19.48 million tonnes for 2019-20. The 2019-20 crop was adjusted from an earlier estimate of 18.65 million tonnes.

While the canola number came in at the lower end of trade estimates, that was countered somewhat by upward revisions to the 2018 and 2019 crops, Jubinville said. As a result, prices will likely continue to trade off of outside factors, such as the Chicago Board of Trade (CBOT) soy complex.

StatsCan’s August report is often downplayed by market participants on the sentiment that farmers underreport their crops in the survey.

While it remains to be seen how far off the 2020-21 final numbers will be from Monday’s estimate, Jubinville expected both the canola and wheat numbers would likely be revised higher. However, adverse weather in some areas over the past month may have also cut into production.

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.

Table: Quick summary of Statistics Canada’s August production estimates for 2020-21, in millions of tonnes. Results compiled using model-based data. Trade’s pre-report estimates and StatsCan’s year-ago numbers included for comparison. Source: Statistics Canada.