The canola crop on Gerry Gross’ 1,200-acre farm in Outlook, Saskatchewan, is proving resilient. Yields will probably be the same as last year, even after heavy rain dumped 2 inches (5.1 centimeters) of water on plants in June.
“It’s a gorgeous crop,” Gross, 62, said during an interview in Saskatoon, Saskatchewan, as he held up his smartphone to displays a photo of his dense, yellow field. “The whole farm looks beautiful.”
Dry conditions in July helped some fields recover from record rainfall the prior month across growing areas in Canada, the world’s biggest canola producer. Improving weather combined with a better production outlook for fields that were outside the floodzone means that this year’s yields are poised to be higher than the five-year historical average, a CWB crop tour showed last week. Ample supplies may drive futures to a four-year low, RBC Dominion Securities forecasts.
“I’m shocked how good the crop looks,” said Charles Wildeman, 63, who planted about 1,500 acres of canola at his farm near Esk, Saskatchewan. This year’s production will probably reach “average” size even after the “ugly” June rains, he said.
The outlook for improving yields is helping to quell supply concerns after municipalities in Saskatchewan and Manitoba declared a state of emergency after the flooding. Even after the storms and spring-planting delays, about 71 percent of the crop is rated in good-to-excellent condition in Saskatchewan, the nation’s top producer, provincial data show.
Production will probably reach 14 million metric tons this year, according to Phil Speiss, commodity futures broker for RBC Dominion in Winnipeg, Manitoba. While that’s down from last year’s record 18 million tons, it’s higher than the 13.9 million collected in 2012.
“It’s nowhere near last year, but it’s a good sized crop,” Speiss said in a telephone interview.
Canola may fall to as low as C$400 a metric ton, if U.S. weather favors the soybean crop this month, Speiss said. That would be the lowest since June 2010.
Prices slumped 8 percent since the end of April to C$439.30 yesterday on ICE Futures Canada in Winnipeg. About 84.8 million soybean acres will be sown in the U.S. this year, the most ever, government data show. Some consumers that crush oilseed can substitute soybeans for canola.
Canola-yield potential is estimated at 34.3 bushels per acre, lower than the 40 bushels collected in 2013 and above the five-year average of 34.2 bushels, according to data collected by CWB during a four-day tour of the region that concluded July 31.