Canada: Grains and oilseeds outlook

For 2010-11, Canadian producers increased the areas seeded to canola, soybeans, spring wheat, oats, and corn and decreased the areas seeded to durum, barley, rye and flaxseed from 2009-10, according to Statistics Canadas (STC) May seeding intentions survey, released on June 23, 2010. However, the actual areas seeded may differ significantly from the survey results because of the extreme wet conditions in Manitoba, Alberta and especially Saskatchewan in May and June. Excess moisture has prevented many producers from completing their seeding and, as well, fields which had already been seeded have been damaged. Abandonment is expected to be significantly above normal and average yields are forecast to be below normal due to extreme wet conditions and cool temperatures across western Canada. In Eastern Canada, abandonment and yields are forecast to be near normal. The outlook assumes near normal crop quality. The price forecasts assume that the Canadian dollar will be near par with the US dollar, based on the average of forecasts from the five major Canadian banks.

Total production of grains and oilseeds (G&O) in Canada is forecast to decrease by 13% from 2009-10 to 57 million tonnes (Mt). Supply is also forecast to decrease significantly despite high carry-in stocks. Total exports are forecast to decrease due to lower exports of wheat (ex durum), canola and flaxseed. Total domestic use is forecast to decrease significantly as lower feed use more than offsets higher food and industrial use. Total carry-out stocks are expected to fall by 30%, well-below the 10 year average. In general, grain prices are expected to decrease from the 2009-10 level but remain above historical averages. The main factors to watch in Canada are temperatures and precipitation, exchange rates and the condition of the world crops.

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