Canada - Canola harvest smaller than expected, wheat output slightly bigger

16.09.2022 211 views

Canada's canola crop is smaller than the industry and federal government expected, while the wheat harvest looks slightly bigger and is the third-largest on record, a government report showed on Wednesday, Sept. 14.

Canada is the world's third-largest wheat exporter and the biggest shipper of canola, an oilseed that produces vegetable oil. Canadian crop production has rebounded strongly after severe drought shrank last year's harvest, helping limit food inflation related to Russia's invasion of Ukraine.

Statistics Canada said farmers will harvest 19.1 million metric tons of canola, up 39% from last year, but down from StatsCan's August estimate of 19.5 million. The trade expected 19.9 million metric tons, on average, in a Reuters survey before the report.

"It's been dry in Western Canada the last month so (the crop) probably didn't fill as well as farmers had hoped," said Lawrence Klusa, president of consultancy Seges Markets, referring to canola seeds filling with their valuable oil as the crop develops.

While canola production jumped from a year ago, Canada's harvest would be the second-smallest in seven years.

StatsCan's disappointing harvest estimate comes two days after the U.S. Department of Agriculture said U.S. supplies of soybeans — another oilseed — would fall to multiyear lows due to hot and dry weather.

ICE Canada November canola futures pared their losses slightly after the report, but were down 0.4%.

StatsCan's production estimates are based on satellite images and weather data through August, accounting for one additional month of the growing season than its previous report on Aug. 29.

All-wheat production looks to reach 34.7 million metric tons, up a tad from its August estimate of 34.6 million and 56% more than last year. The category includes both spring wheat, used in baking, and durum, used to make pasta.

Traders and analysts, on average, expected StatsCan to estimate wheat production of 34.5 million tonnes.

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