5th Dec 2012, by Agrimoney
Hopes for Canada's wheat exports nudged higher after the country's upgraded ideas for the rebound in its harvest this year, boosted by yields which in Manitoba jumped by 27%.
Canada's wheat harvest reached 27.2m tonnes, some 500,000 tonnes higher than previously thought, Statistics Canada said.
The figure, a 7.6% rise year on year, and at the upper end of market expectations, raised expectations that Canada could be on course to lift its exports even beyond levels currently being factored in – potentially at the expense of US trade.
Canada's farm ministry has pegged domestic wheat shipments in 2012-13 at 18.75m tonnes, with the US Department of Agriculture and International Grains Council putting the figure at 19.0m tonnes.
'Could get aggressive on exports'
However, a figure of 19.0m-20.0m tonnes looks "easily within reach", Benson Quinn Commodities analyst Brian Henry said.
"This morning's figures indicated they could get aggressive on exports," Mr Henry told Agrimoney.com, adding that the "vast majority" of Canada's crop was of high quality too."Depending on how much the trade believes they need to carry forward, exporters in Canada have a lot of work to do," probably largely "at the expense of" US hard red winter wheat.
Improved Canadian supplies would represent a second fillip this week for importers, after Australian officials on Monday came in with an export forecast some 4m tonnes higher than the USDA is factoring in.
Wheat stocks in major exporters have been seen falling to a five-year low in 2012-13.
Brazil potential?
While Canadian wheat is more directly comparable to US hard red spring wheat, opportunities for extra trade in this area appear more limited, with American shipments performing well.
It is in competing against hard red winter wheat that Canada may find more joy, Mr Henry said, adding that "one market that has popped up is Brazil", which last month purchased hard milling wheat from Germany.
Brazil, besides itself believed to have suffered a disappointing harvest, with its Conab crop bureau pegging the domestic 2012-13 crop at 4.4m tonnes compared with the USDA estimate of 5.0m tonnes.
And Brazil's typical source of import supplies, Argentina, is seeing a sharp drop in output too, undermined by a switch to barley and excessive rain.
'Adverse effect on yields'
The StatsCan data also showed that Canada's soybean harvest had been bigger than thought, reaching a record 4.9m tonnes, up 14.7% year on year, and 650,000 tonnes higher than the previous estimate.
However, the figure for Canada's important canola crop was trimmed further, by some 50,000 tonnes to 13.3m tonnes, after "weather conditions during harvest, such as hail, had an adverse effect on yields".
And the estimate for the barley harvest was downgraded by nearly 600,000 tonnes to 8.0m tonnes.
With investors having expected the canola harvest to be pegged at 13.7m-tonnes, futures in the oilseed gained ground in Winnipeg, standing 1.3% higher at Can$597.60 a tonne in afternoon deals.
Hopes for Canada's wheat exports nudged higher after the country's upgraded ideas for the rebound in its harvest this year, boosted by yields which in Manitoba jumped by 27%.
Canada's wheat harvest reached 27.2m tonnes, some 500,000 tonnes higher than previously thought, Statistics Canada said.
The figure, a 7.6% rise year on year, and at the upper end of market expectations, raised expectations that Canada could be on course to lift its exports even beyond levels currently being factored in – potentially at the expense of US trade.
Canada's farm ministry has pegged domestic wheat shipments in 2012-13 at 18.75m tonnes, with the US Department of Agriculture and International Grains Council putting the figure at 19.0m tonnes.
'Could get aggressive on exports'
However, a figure of 19.0m-20.0m tonnes looks "easily within reach", Benson Quinn Commodities analyst Brian Henry said.
"This morning's figures indicated they could get aggressive on exports," Mr Henry told Agrimoney.com, adding that the "vast majority" of Canada's crop was of high quality too."Depending on how much the trade believes they need to carry forward, exporters in Canada have a lot of work to do," probably largely "at the expense of" US hard red winter wheat.
Improved Canadian supplies would represent a second fillip this week for importers, after Australian officials on Monday came in with an export forecast some 4m tonnes higher than the USDA is factoring in.
Wheat stocks in major exporters have been seen falling to a five-year low in 2012-13.
Brazil potential?
While Canadian wheat is more directly comparable to US hard red spring wheat, opportunities for extra trade in this area appear more limited, with American shipments performing well.
It is in competing against hard red winter wheat that Canada may find more joy, Mr Henry said, adding that "one market that has popped up is Brazil", which last month purchased hard milling wheat from Germany.
Brazil, besides itself believed to have suffered a disappointing harvest, with its Conab crop bureau pegging the domestic 2012-13 crop at 4.4m tonnes compared with the USDA estimate of 5.0m tonnes.
And Brazil's typical source of import supplies, Argentina, is seeing a sharp drop in output too, undermined by a switch to barley and excessive rain.
'Adverse effect on yields'
The StatsCan data also showed that Canada's soybean harvest had been bigger than thought, reaching a record 4.9m tonnes, up 14.7% year on year, and 650,000 tonnes higher than the previous estimate.
However, the figure for Canada's important canola crop was trimmed further, by some 50,000 tonnes to 13.3m tonnes, after "weather conditions during harvest, such as hail, had an adverse effect on yields".
And the estimate for the barley harvest was downgraded by nearly 600,000 tonnes to 8.0m tonnes.
With investors having expected the canola harvest to be pegged at 13.7m-tonnes, futures in the oilseed gained ground in Winnipeg, standing 1.3% higher at Can$597.60 a tonne in afternoon deals.
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