Canada's 2012-13 canola crop was likely considerably smaller than the record production forecast by Statistics Canada in August -- and market participants will watch the agency's latest survey results on Oct. 4 closely to see just how much tighter the supply situation is.
After hot and dry weather cut into yields in July and August, and heavy winds blew swaths around in early September, industry participants are generally of the opinion that production was well below the 15.4 million tonnes the government's statistics agency forecast in August.
Trade estimates range from about 14 million to 15 million tonnes, with average guesses coming in around 14.7 million. Canada grew 14.16 million tonnes of canola in 2011-12.
"The canola crop just did not do as well as it looked," said Jerry Klassen, manager for GAP Grains and Produits in Winnipeg. "Everyone is expecting a cut, but the key will be 'how severe of a cut will we see,'" he added, noting that the smaller crop is already being reflected in the firm basis levels being offered by end users.
From the side of the road the canola crops across Western Canada looked full this year, but when the harvest actually came off the yields just weren't there, said Wayne Palmer, senior market analyst with Agri-Trend Marketing.
Disease, heat and wind damage all added to the yield losses in canola, he said.
Darren Frank of FarmLink Marketing Solutions said the question of how much of the canola crop was lost from wind damage will be up for debate, as this report may not account for the full extent of the losses there.
If StatsCan pegs the canola crop at anything over 15 million tonnes, "the market just won't believe it," he said.
Only minor adjustments are expected to the production estimates for the other grains and oilseeds.
"Canola really took a hit with the heat... but wheat and durum were able to better withstand the heat," said Klassen.
"The wheat crop held in there very well for the most part," added Palmer.
Frank also agreed that wheat production likely wouldn't be that far off from the 27 million tonnes forecast by StatsCan in August.
Durum production may even be revised higher, he said, as yield reports were good for the crop. He expected the crop could be 200,000 to 300,000 tonnes larger than earlier estimates.
Canadian all-wheat production in 2011-12 came in at 25.3 million tonnes. Of that total, durum made up 4.2 million tonnes and other spring wheat 18.0 million. In August, StatsCan pegged 2012-13 durum production at 4.3 million tonnes, and other spring wheat at 19.1 million.
Barley could see a slight revision to either side of the 9.5 million tonnes forecast by StatsCan in August, with average trade guesses calling for a 100,000- to 300,000-tonne cut. Canadian barley production in 2011-12 came in at 7.8 million tonnes.
-- Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.