Situation report — December 2011

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Wheat and canola production up, corn and soybeans down

Production of all varieties of wheat at the national level increased from 2010, while canola production hit a record high, according to the Statistics Canada November farm survey of approximately 28,600 Canadian farmers. In contrast, farmers reported a decline in both corn and soybean crops. The final 2011 survey of crop production in Canada was conducted from October 24 to November 10.

Nationally, total wheat production was up 9.0% or 2.1 million metric tonnes from 2010 to 25.3 million metric tonnes. Farmers reported record yields for wheat in both Alberta and Saskatchewan. This drove total production up 9.0% to 8.9 million metric tonnes in Alberta and up 20.5% to 11.5 million metric tonnes in Saskatchewan.

A significant contributor to the overall production increase was durum wheat. Durum wheat production increased 36.4% in Saskatchewan to 3.6 million metric tonnes and 47.1% in Alberta to 620 500 metric tonnes. These increases followed substantial declines from 2009 to 2010.

Overall, canola production increased 10.7% from 2010 to a record 14.0 million metric tonnes. New highs in both Alberta (5.3 million metric tonnes) and Saskatchewan (7.0 million metric tonnes) were reached but declined 25.3% in Manitoba, where farmers were unable to recover from early season flooding.

Soybean production in Ontario, Quebec and Manitoba declined from record levels in 2010, primarily the result of lower yields. This occurred despite record harvested areas in both Manitoba and Quebec.

Ontario soybean production amounted to 3.0 million metric tonnes, a decline of 2.7% from the all-time high set in 2010. Production in Quebec declined 0.9% to 800 000 metric tonnes despite a record harvested area. In Manitoba, farmers reported a record harvested area of soybeans for 2011. However, lower yields had an impact on production, which fell 5.0% to 413 700 metric tonnes.

Grain corn production decreased in both Ontario and Quebec, -6.6% and -14.1%, respectively.

Higher global projections for wheat, corn and oilseeds

Global wheat supplies for 2011/2012 are projected to be 9.3 million tons (imperial) higher with larger beginning stocks in Australia and Argentina and a 5.7 million-ton increase in foreign production as reported in the December United States Department of Agriculture's (USDA) World Agricultural Supply and Demand Estimates.

Larger world supplies of wheat and competitive prices relative to corn boost prospects for 2011/12 world wheat trade. Global imports are raised 1.4 million tons with increases for several Asian countries where wheat feeding is expected to be higher including South Korea, Japan, the Philippines, Thailand, and Vietnam. Increased wheat imports are expected for Mexico where tight domestic corn supplies are boosting demand for imported feed quality wheat although this is partly offset by a reduction in Syria. Exports are raised 2.5 million tons for Australia and 1.0 million tons for Argentina but are lowered 1.0 million tons for Ukraine and 1.4 million tons for the United States.

Global coarse grain supplies for 2011/12 are projected to be 7.4 million tons higher as lower beginning stocks for corn and barley are more than offset by an 8.5-million-ton increase in corn production, mostly reflecting higher output from China. Global corn beginning stocks for 2011/12 are reduced 0.8 million tons with a downward revision to 2010/11 production for South Africa. Global barley beginning stocks for 2011/12 are lowered 0.8 million tons mostly reflecting the lower 2010/11 Australia barley production estimate recently released by the Australian Bureau of Statistics.

Global corn production for 2011/12 is projected at a new record high of 867.5 million tons, despite a 3.5-million-ton decline year-to-year in the United States. Foreign corn production is expected to be up 43.4 million tons from 2010/11. China 2011/12 production is raised 7.3 million tons to a record 191.8 million tons this month based on the recently released estimate from the National Bureau of Statistics. Corn production is also raised 1.0 million tons for EU-27 and 0.7 million tons for Canada based on the latest government reports.

Global oilseed production for 2011/12 is projected at 457.6 million tons, up 2.8 million tons from last month. Foreign oilseed production accounts for most of the change with increases projected for soybeans, rapeseed, sunflower seed, and peanuts. Global soybean production is projected at 259.2 million tons, up 0.3 million. Increased production for Canada and India is only partly offset by a lower projection for China. Global rapeseed production is projected higher this month mainly due to gains for Canada. Canada rapeseed production is raised 1.3 million tons to 14.2 million based on the latest survey results from Statistics Canada. Higher yields account for most of the change. Rapeseed production for China is reduced 0.3 million tons due to lower yields in line with the latest indications from the China National Grain and Oils Information Center. Other changes include increased sunflower seed production for Ukraine and increased peanut production for China and India.

Global oilseed trade is projected at 114 million tons, up 0.7 million from last month. Increased soybean exports from Brazil, increased rapeseed and soybean exports from Canada, and increased peanut exports from China and India account for most of these gains. Global oilseed ending stocks are projected at 75.5 million tons, up 1.6 million from the previous month mainly reflecting increased soybean stocks in the United States and increased rapeseed stocks in Canada.

Pulse crop processor expects demand to return to normal

Canadian lentil sales were up 187% in July, 224% in August and 55% in September over the same period in 2010 as reported by Sean Pratt in The Western Producer (Nov. 24, 2011). Australian lentil and chickpea sales also experienced an increase. Demand by importers has increased as Canada's recent crop was better quality than last year. Below average production in Turkey has also contributed to this increase.