Statistics Canada issued its revised 2016 Canadian crop acreage data less than an hour ago. As expected the report revealed canola and lentil acres are up versus the April report, while wheat was lowered. No real game-changing results. Traders will quickly move back to weather issues and demand prospects as market drivers.
The June StatCan farm survey was conducted from May 27 to June 12, with approximately 24,500 farms. Farmers were asked to report their seeded areas of grain, oilseeds and special crops.
Canadian farmers reported seeding more land to lentils again this year, continuing the strong upward trend observed over the past four years. Canola acres are up from the April report and back up to the 2015 level. Seeding of soybeans and corn for grain increased, while the areas seeded to spring wheat, oats and barley fell in 2016.
Seeding of most Canadian crops was nearly completed in early June when this survey was taken, ahead of the five-year average. Sowing conditions were generally positive this spring, with only a few localized areas reporting too little or too much moisture. Total crop land lying fallow in 2016 was at an all-time low.
Canadian farmers reported an overall decrease in the area sown to wheat this year down to 23.177 million acres, down 669,000 acres from the April report and off 3.9% from the 24.111 million acres sown last year. The decline from last year was the result of a 9.2% drop in area seeded to spring wheat, which fell to 15.4 million acres in 2016. In contrast, the area seeded to durum wheat rose 4.8% from last year to 6.1 million acres, though steady with the April report.
It's also worth noting that some fusarium headblight disease issues are arising from all the heavy rain we have been receiving across the eastern side of the Canadian Prairies these past couple of weeks. Still, I expect wheat futures to be more attuned to the lower U.S. dollar this morning and charts trying to hold the line at recent lows.
Canadian farmers reported seeding 20.02 million acres of canola in 2016, up 675,000 acres from the April report, but down slightly (-0.4%) from the 20.1 million acres reported in 2015. Lentils Total area seeded to lentils reached a record high of 5.84 million acres in 2016, up 700,000 from the April report and up a whopping 47.8% from the record set in 2015. Trade expectations were 6.0 million acres, so no real surprise here...though it's still going to be a hell of a massive lentil crop...assuming the crop pans out.
The canola market is now showing much reaction to the StatsCan acreage numbers. Relative to strong demand expectations again for the year ahead, this news carries no additional bearish implications for the market. Weather and the goings-on south of the border carries more market weight. Our canola market is going to need some help from the U.S. soy complex if November canola futures are going to get back above $500 per ton. But again, canola is looking comparatively cheap relative to soybean prices, and spread activity to buy canola/sell soy should start to kick in at some point. The spec spreaders are likely heavily short canola/long soy right now, but once they start taking profits it will give canola a kick. But that isn't to say this unusual spread condition couldn't last some time longer.
In 2016, the total area seeded to soybeans grew 1.0% to 5.5 million acres. This increase was the result of a rise in soybean acreage in Manitoba, which set a new record for the province this year. Manitoba farmers seeded a record high of 1.6 million acres in 2016, up 17.3% from 2015. This was the ninth straight increase.
Barley and oats
Nationally, the total area seeded to barley fell 2.2% from 2015 to 6.385 million acres. Interesting the barley numbers declined 392,000 acres form the April report. Alberta and Saskatchewan represented almost 90% of the total barley seeded area in 2016. The total acreage seeded to oats dropped 14.3% from 2015 to 2.861 million acres in 2016...just under the 2.972 million acres projected in April.
Corn for grain
Canadian farmers reported planting 3.3 million acres of corn for grain in 2016, a 1.7% increase from 2015.
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