The grain industry might have to come up with a new term for this year’s harvest because bumper crop doesn’t adequately describe what’s coming off the combines.
“In my 25 years in the grain business, I’ve never seen a crop this big from corner to corner,” said Derek Squair, president of Agri-Trend Marketing Inc.
Based on his discussions with Agri-Trend clients, average yields are almost unspeakable.
“I hate to say it out of my mouth because I’m sure no one will believe it,” he said.
Squair is forecasting a prairie-wide harvested average of 55 bushels per acre for spring wheat, 105 bu. for feed barley, 85 bu. for soft white wheat, 30 bu. for lentils and 45 bu. for peas.
But it’s the canola estimate that is jaw-dropping. Squair believes the average harvested yield will be a staggering 50 bu. per acre.
“The conditions were just right this year,” he said.
“We had a lot of rain in June and we had cool weather when things were flowering in July and we had a hot August. I mean, that’s ideal conditions.”
Squair said his numbers are a reflection of what showed up on yield monitors. They will have to be adjusted down by as much as 15 percent to reflect acres lost to spring flooding across Western Canada.
Even with a 15 percent discount, that’s an average canola yield of 42.5 bu. per acre, obliterating the previous record of 35.3 bu. set in 2009.
Saskatchewan Agriculture, which released yield estimates last week, is forecasting a 43 bu. spring wheat crop and a 35 bu. canola average.
“We’ll blow those out of the water,” said Squair.
His canola production number destroys Statistics Canada’s July forecast of 14.4 million tonnes and August trade expectations of 15 to 15.5 million tonnes.
“If we hold these yields, we can get to 18 million tonnes, (although) I’m not sure we’ll get there yet,” he said.
There was no frost in the forecast for at least another week and a half as of Sept. 13.
Squair isn’t the only one in uncharted territory. Larry Weber of Weber Commodities Inc. is forecasting 17 to 18 million tonnes of canola.
The CWB estimates 16.4 million tonnes of the oilseed, which seems conservative based on what one of the grain company’s analysts had to say about average yields.
“(For) canola, 40-plus is what we’re expecting,” said Chris Palmer, a futures trader with CWB.
Keith Gabert, agronomy specialist with the Canola Council of Canada in central Alberta, thinks the early-season projections need to be tempered a bit because much of the crop is still in the field. Barely any of the crop has been combined in his area of the province.
“I’m hearing all those same (yield) numbers, and it just seems early for me because I’ve yet to see a canola sample off a combine,” he said.
“It’s almost like we’re tripping over each other at this point to come up with a higher number.”
Gabert thinks it is too soon to be talking about a 40 or 50 bu. per acre canola crop, given that the prairie harvest was about 40 percent complete as of Sept. 13.
“I’m just trying to be a little cautious. It sounds almost too good to be true,” he said.
However, he acknowledged it has been a fairytale year for Canada’s Cinderella crop.
“We didn’t have a lot of that flower-blasting, yield-reducing heat in the flowering period,” said Gabert.
It was also an exceptional year for growing spring wheat and most other crops.
CWB is forecasting 30.7 million tonnes of wheat and durum, which is below the U.S. Department of Agriculture’s forecast of 31.5 million tonnes. Neither of those numbers would break the record of 32 million tonnes set in 1990.
Palmer has heard many reports of 40 to 60 bu. spring wheat crops.
“There’s a few guys in the lower range, but 70 isn’t an unusual number that we’re hearing,” he said.
Squair has never heard such widespread reports of good fortune. There are usually one or two major regions of the Prairies suffering from drought or floods or frost, but damage has been limited so far in 2013.
“In canola, everyone we talk to is between 45 and 60 (bu. per acre). Wheat, it’s the same sort of thing. It’s not really variable. Everyone is between 55 and 70.”
Squair said winter wheat and rye are the only two crops where production will be below last year. For most other crops, expect double-digit percentage increases in production.
CWB is forecasting nine million tonnes of barley, 3.75 million tonnes of peas and 1.65 million tonnes of lentils. It would be the biggest pea crop and the second biggest lentil crop on record.
Darren Lemieux, head trader and market analyst with Simpson Seeds Inc., said eye-popping red lentil crops are coming off fields this year.
“We’ve definitely been hearing reports from growers and coffee row of guys getting in that 50, even touching close to 60 bu. per acre on red lentils,” he said.
“In a normal year getting to 40 would be excellent. Fifty is unheard of. Sixty is unheard of in the past.”
He believes yields will drop as more of the crop in eastern Saskatchewan comes off. Farmers were late getting into the fields and had more flooding in that area.
The same weather conditions that made red lentils produce prolifically resulted in smaller-than-normal caliber large green lentils. However, early yields have also been phenomenal for the greens.
It doesn’t bode well for prices if the weather holds and the forecast for a massive 2013 western Canadian crop becomes a reality.
Palmer said the big wheat crop that is on the way will add to what is expected to be an ample harvest in the Black Sea region and other areas of the world.
“There’s going to be price pressure coming out of trying to sell all this great big quantity, so when we look at prices now, they might look pretty favourable in a few months time,” he said.
Squair said canola will be somewhat insulated from downward price pressure by the disappointing U.S. soybean crop.
“Fortunately, we’ve got a neighbour to the south that has got a problem,” he said.
Lemieux said the price outlook is grim for lentils, especially red lentils, given the record-breaking yields.
Some thought earlier in the year that Canada may run out of large green lentils because of reduced acres, late seeding and a cool spring, but reports of yields in the 30 to 40 bu. per acre range mean those fears are long gone.
