Posted May. 3rd, 2012 by Ed White
Canola will stretch as far as the eye can see as farmers cash in on high prices. | File photo.Farmers are bullish about almost every crop, Statistics Canada’s March seeding intentions report shows.
However, it also offers more evidence of the long-term trend of farmers embracing canola and avoiding spring wheat. Each year farmers plan to grow more canola than the previous year, but they generally plan to grow less spring wheat.
This year, prairie farmers intend to seed 20.37 million acres of canola and 17.18 million acres of spring wheat.
That is a new record for canola acreage, well above last year’s 19.22 million acre intention.
However, it is the third lowest intended acreage for wheat in a decade, only marginally above 2007 and 600,000 acres more than 2008?s 16.58 million acres.
In 2003, farmers intended to plant almost 19 million acres of wheat and 10.94 million acres of canola. Intended canola acreage is now almost double what it was and well above the spring wheat total, capping a total role reversal.
Another long-term trend is for farmers to increase their actual planted acreage of canola from the March seeding intentions report but to decrease spring wheat acreage.
Many analysts expect to see that happen again this year.
“Every grower out there is trying to figure out a way to sneak in another 60, 80 or 100 acres more canola,” said Ken Ball, a broker with Union Securities in Winnipeg.
There is still room for canola acreage to grow. Some analysts had predicted farmers would intend to plant 22 million acres of canola this year, with a couple guessing 23 million acres.
The canola number in the planting intentions report, although a record, is actually bullish for canola because it is at the low end of expectations.
However, spring wheat acres could be vulnerable to any weather problems. Analysts say the higher spring wheat acres, as well as relatively big acres for most other crops, are a product of the collapse of summerfallow acres.
Statistics Canada predicts farmers will leave less than four million acres idle after leaving 12.4 million fallow in last year’s wet growing season and 10.7 million in similarly wet 2010.
Analysts aren’t surprised that in-tended summerfallow acreage would drop, but virtually all analysts were surprised by the tiny number.
“It adds two million more acres into the mix that I wasn’t expecting,” said Chuck Penner of LeftField Commodity Research, who thought six million was a more likely number.
“It allows all of the crops to expand their acres.”
Jon Driedger of FarmLink Marketing Solutions was also surprised by the summerfallow number, which is boosting crop acreage numbers.
“The summerfallow was so incredibly low, by far a record low. What that does is add acres to everything else,” said Driedger.
However, with farmers keen to plant canola above everything else, they will likely keep or increase their canola acres if weather problems occur but cut crops such as wheat and oats that are less financially attractive.
Winnipeg analyst Marlene Boersch said she thinks cereal grains will likely suffer most if seeding problems occur.
“It’s probably a little overstated,” said Boersch about the cereal grain acreages.
Another phenomenon likely to cut former CWB grain acreage is the slow development of forward sales contracts with grain companies, Boersh said. With farmers able to lock in profitable prices with some crops but generally not with spring wheat and durum, they might favour the crops that they can hedge.
However, if everything goes into the ground as farmers intended when they were surveyed by StatsCan, and there is good weather, then farmers might discover how far they can push the grain handling system, Boersch said.
“If the total acreage really is that high, we probably will have some problems with our export capabilities because we rarely do more than 30 million tonnes,” said Boersch.
“That could, in a good year, cause some problems.”
Statistics: Posted by yoda — Sat May 05, 2012 9:00 pm
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Oil World cut its forecast for South American soybean production, extending the run of downgrades amid ideas that rains in the last two weeks have been insufficient to put a hold on crop losses.
The influential analysis group trimmed its estimate for the Brazilian harvest by 500,000 tonnes to 69.5m tonnes.
The downgrade put it in line with a 69.2m-tonne estimate from Conab, Brazil’s official crop bureau, last but below the 72.0m tonnes forecast by the US Department of Agriculture, whose data set world benchmarks.
And Oil World slashed by 1.4m tonnes to 4.6m tonnes its forecast for the harvest in Paraguay, the world’s fourth-ranked exporter of the oilseed, which the USDA sees producing 6.4m tonnes.
"[There was] very little rainfall received in southern Brazil, Paraguay, Uruguay and Argentina yesterday and very little expected in the next few days, further stressing developing soybeans and other crops," the German-based group said.
The downgrades more than offset a 500,000-tonne lift, to 47m tonnes, in Oil World’s forecast for the Argentine soybean harvest.
‘Bad and fast growing worse’
The comments cast doubt on hopes that improved rains for some areas, such as central Argentina, which received "moderate but scattered showers" on Monday according to WxRisk.com, can reverse the spate of South American crop downgrades.
The Australian Bureau of Meteorology said that the La Nina weather pattern blamed for weather extremes in South America, and elsewhere, "showed some signs of weakening over the past fortnight as the tropical Pacific Ocean warmed".
However, the La Nina is to retain climatological influence "over the coming months".
Martell Crop Projections said that "intense heat and dryness is persisting in south Brazil soybean states Parana and Rio Grande do Sul", where soybean potential was "bad and fast growing worse with little rain in the forecast".
While Argentina’s central grain belt may receive "extremely heavy soaking rains" this weekend, "south Brazil continues to struggle with only light and scattered rain".
USDA officials said on Friday that rains was "urgently needed" in Rio Grande do Sul "to ease the stress" on soybeans.
Further north, in central Brazil, too much rain has been a problem for much of the season, raising fears for the spread of rust, a concern which Oil World also highlighted on Tuesday.
A recent drier spell has enabled growers to press on with harvesting, getting more than 13% of soybean crops in the silo last week alone in the top producing state of Mato Grosso, to bring the total completed to 24.3%.
"The climate was favourable to fieldwork," FCStone’s Brazil division said.
However, the broker added that "the weather forecast for the next five days indicates rain… which may damage the soybean harvest"
Statistics: Posted by yoda — Tue Feb 14, 2012 2:57 pm
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