Canada's Projected Record Canola Acreage May Rise Further

Canadian farmers are expected to plant record canola acres this spring, Statistics Canada said Monday in its planting intentions report.

However, actual area will likely end up even higher than the government projections, according to market participants.

Most other crops were in line with trade estimates, but could also see some adjustments in future reports.

Intended canola area was pegged at 16.907 million acres, which would be a 700,000 acre increase from the previous year. While it would be a record, the Statistics Canada figure was still at the low end of trade estimates, and market participants were generally of the opinion that actual seedings could end up closer to 17.5 million acres.

"I think [the canola area] will be bigger by the time it's all said and done," said a commission-house canola trader.

Ken Ball, a canola broker with Union Securities, also said the canola number was at the low end of trade guesses, but was neutral overall and would likely see some upward revisions in future reports.

Mike Jubinville, of ProFarmer Canada, said it was hard to be bullish on a record-sized canola crop, but noted demand outlooks appear strong for canola.

All-wheat acres were estimated at 23.221 million by StatsCan, which was in line with market expectations, but down from the 24.457 million acres planted the previous year. Of the total, intended durum acres were down sharply to 3.685 million, from 5.660 million, while spring wheat increased to 18.130 million, from 16.930 million.

"It looks like a lot of durum growers decided to switch to spring wheat," said Ball. While the switch in acres was larger than trade expectations, he said the shift wasn't large enough in the scope of the world wheat market to move prices.

Jubinville added that the drop in durum area was needed given the bearish supply/demand outlook on the crop.

Canadian barley acres were forecast at 8.344 million acres by StatsCan, which was in-line with trade guesses and slightly below the 8.663 million acres planted the previous year.

Oats were also in line with trade guesses at 3.992 million acres, a slight increase from the 3.731 million acres grown the previous year.

Flaxseed area was forecast at 1.435 million acres, which would be down from the 1.710 million acres grown in 2009, but in line with trade estimates.

Peas were pegged at 3.620 million acres, down slightly from the 3.760 million grown in 2009. Jubinville said peas could be down further in future reports given the downturn in pea prices over the past month since the survey was completed.

Source: CME Group