Canada Reduces Canola Harvest Estimate, Reduces Durum Harvest – Markets

WINNIPEG, (Manitoba): Canada reduced its estimate of the country’s canola crop, the lowest in 14 years, and lowered its estimate of durum wheat production to lowest on record amid severe drought burned prairie crops, according to a government report released on Friday.

Canada is one of the world’s largest exporters of wheat and the largest producer and shipper of canola, which is used to produce vegetable oil and feed. The drought in the country has contributed to a decline in the global supply of high protein wheat essential for breadmaking.

Canola prices have hit all-time highs this year as crushers and importing countries like China and Japan vie for meager supplies.

Canola production rose to 12.6 million tonnes, slightly lower than Statistics Canada’s September estimate of 12.8 million, which was also the average trade expectation of a Reuters survey.

Statistics Canada has set the whole wheat crop at 21.7 million tonnes, unchanged from its previous estimate, but exceeding average trade expectations by 21.2 million tonnes. The wheat harvest was down 38.5% from last year.

StatsCan has lowered its estimate of durum wheat, which is used to make pasta, from 3.5 million tonnes to 2.7 million tonnes.

The government agency’s reduction in its durum estimate reflects the crop being grown in the “bullseye” of this year’s drought, said Jonathon Driedger, vice president of LeftField Commodity Research.

Otherwise, the new estimates were not surprising.

“If I had accidentally printed the September report, I might not have noticed it,” he said. “This is an uneventful report.”

ICE Canada January canola futures prices edged up on the modest crop reduction, gaining 1%.

The spring wheat crop of 16 million tonnes is down 38% from last year, although StatsCan raised its estimate from September’s 15.3 million.

Statistics Canada used a farmer survey to determine the latest crop estimates, unlike its earlier production reports this year which relied on satellite data and analysis.

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