As of December 31, 2011, total stocks of most principal field crops, including commercial and on-farm inventories, were down compared with the same date in 2010, according to the February 3rd release of Statistics Canada’s Field Crop Series (Stocks of Principal Field Crops).

The December Farm Survey of 10,560 Canadian farmers is a survey of stocks of principal field crops conducted from January 3 to 10, 2012. Farmers were asked to report the amounts of grain, oilseeds and special crops in on-farm storage. Data on commercial stocks of western major crops originate from the Canadian Grain Commission. Commercial stocks of corn and soybeans are estimated by a Statistics Canada sample of grain elevators in Eastern Canada. Data on commercial stocks of special crops originate from a survey of handlers and marketing agents of special crops.

Despite record production of canola in 2011, total stocks declined for the second consecutive year, down 1.5% to 9.3 million metric tonnes.

On-farm stocks of all types of wheat fell 4.0% to 16.3 million metric tonnes. However, commercial stocks increased 20.9% to 4.7 million metric tonnes. As a result, total stocks edged up 0.6% from December 31, 2010, to just under 21.0 million metric tonnes, despite a 9.0% increase in wheat production in 2011. The decline in on-farm stocks at the national level was the result of a decrease in on-farm storage in Saskatchewan and significant declines in production and on-farm storage in Manitoba.

Total stocks of corn for grain fell 4.0% to 8.6 million metric tonnes in reflecting the 2011 decline in production. However, on-farm stocks rose 1.5% to 6.8 million metric tonnes, the result of a 4.9% increase in on-farm stocks in Ontario, where they reached a record high.

Total stocks of oats and barley fell 14.5% and 9.6% respectively, despite production increases in 2011. Declines in total stocks have been recorded for the last three years for both of these crops.

For soybeans, total stocks rose 0.6% to 2.6 million metric tonnes, despite a production decrease of 2.3% in 2011. On-farm stocks increased 20.2% to 1.8 million metric tonnes. This increase was driven by record on-farm storage levels of 1.1 million metric tonnes in Ontario. Meanwhile, commercial stocks fell 26.9% to 770 000 metric tonnes, their lowest level since 2003.

Pulse and Special Crops acreage to increase for most crops

For 2012/13, total area seeded to pulses and special crops is forecast to increase by 9% from last year to 2.6 million hectares according to Agriculture and Agri-Food Canada’s publication Canada: Pulses and Special Crops Outlook. The areas seeded for dry peas, dry beans, chickpeas, mustard seed, canary seed and sunflower seed are expected to increase while lentil area is expected to decline for the second year in a row.

Total production is expected to rise by 10% from last year. However, supply is expected to fall slightly due to lower carry-in stocks. Total exports are expected to rise while domestic use is expected to decline.

USDA forecasts increase in global wheat supplies

The United States Department of Agriculture projects global wheat supplies to be 1.9 million metric tonnes higher with larger beginning stocks in Kazakhstan and increased production for India, Kazakhstan, and Morocco.

Global trade of wheat is raised slightly for 2011/12 with world imports increasing 0.7 million metric tonnes. Global wheat consumption is reduced 0.9 million metric tonnes mostly reflecting a reduction in food use wheat in India.

Reduced corn production causes coarse grain stocks to drop

Global coarse grain (corn, barley, oats and rye) supplies for 2011/12 are projected to be 2.8 million metric tonnes lower largely due to reduced corn production projections in Argentina and Paraguay. Partly offsetting the reduction are small corn production increases for EU-27 and the Philippines. Global barley production is raised with Argentina production up 0.6 million metric tonnes on higher reported area and yields for the crop that was harvested during late 2011.

Global coarse grain trade for 2011/12 is raised with higher corn imports for EU-27 and higher barley imports for Saudi Arabia, EU-27, and Jordan. Partly offsetting is a reduction in corn imports for Canada.

Global oilseed production and stocks down

Global oilseed production for 2011/12 is projected at 410.5 million metric tonnes, down 4.5 million metric tonnes from last month.

Global oilseed trade for 2011/12 is projected to be down 2.4 million metric tonnes mainly reflecting reduced soybean export projections for Brazil, Argentina, and Paraguay. Soybean imports are reduced for China, EU-27, South Korea, Russia, and several Middle East countries. Global oilseed ending stocks are projected at 64.6 million metric tonnes, down 3.3 million metric tonnes from last month. Reduced soybean stocks in Brazil and Argentina account for most of the change.

Source: Statistics Canada

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Compared with the same month in 2010, the livestock and animal products index (+14.1%) and the crops index (+4.9%) both increased in December.

Relative to December 2010, advances were recorded in all livestock commodities, ranging from 3.3% for dairy to 21.5% for cattle and calves.

All of the livestock commodities recorded year-over-year increases every month in 2011 except for a decrease in the hogs index in May (-2.8%). Lower on-farm inventories of cattle and hogs in North America and higher feed grain costs have supported the year-over-year growth trends.

The crops index recorded the smallest year-over-year increase since September 2010, largely the result of a drop in the grains index (-2.8%), ending a year-over-year growth trend that had started in September 2010. All other commodities advanced. Increases ranged from 2.9% for vegetables to 21.6% for fruit.

Like the grains index, the oilseeds index (+3.7%) had started its year-over-year growth trend in September 2010. However, since June 2011, its rate of increase has been diminishing. The International Grains Council and United States Department of Agriculture continued to forecast an increase in total world grain production for 2012.

On a monthly basis, the December index decreased (-0.8%) as both the livestock and animal products index (-1.4%)
and the crops index (-0.7%) fell. It was the third consecutive monthly decline in the overall index.

Source: Statistics Canada

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Statistics Canada published stock value as at July 31st, 2011 on September 7th, 2011. Results show that total stocks of wheat, barley, oats and canola were down compared with the same date in 2010.

Total stocks of wheat decreased 8.2% to 7.2 million tonnes, mostly the result of an 18.8% decline in on-farm stocks. Commercial stocks were little changed.

Much of the decrease occurred for durum wheat, where total stocks fell 41.5% during the year to 1.6 million tonnes.

Total stocks of barley declined 44.2% to 1.4 million metric tonnes. Barley production fell in 2010, as a result of reduced harvested area. Declines of on-farm stocks occurred in all four western provinces, but were most pronounced in Manitoba and Saskatchewan.

Total stocks of canola decreased 19.2% to 1.8 million metric tonnes. This was primarily a result of on-farm stocks, which declined by 33.9% to 820,000 metric tonnes. Despite the decline, total canola stocks remained at the five-year average (2006 to 2010) of 1.8 million metric tonnes.

Overall stocks of oats fell 34.3% to 769,000 metric tonnes. This follows a sharp decline in oat production in 2010. On-farm stocks of oats were down 37.2% while commercial stocks fell 24.2%.

La Coop Fédérée continues its Canadian expansion

La Coop Fédérée, based in Montréal, recently purchased two Canadian enterprises specialised in the grain and fertiliser sectors: Grower Direct Exports, based in Ontario, and Agrico Canada, a company based in Manitoba and Saskatchewan.

Grower Direct Exports specialises in the grain trade.

Agrico specialises in the chemical fertiliser and phytosanitary product sector and owns three distribution centres. La Coop Fédérée will also gain access to the eleven retail enterprises belonging to Agrico.

Tighter tolerances for vomitoxin in wheat futures contract

The Chicago Board of Trade (CBOT) announced tighter tolerances for vomitoxin in its wheat futures contract. Vomitoxin develops in crops attacked by fusarium. Wheat testing four or more parts per million (ppm) vomitoxin will no longer be deliverable against futures contracts. The discount for wheat containing three ppm will rise from 12 to 20 cents per bushel, effective at the open of the September 2013 contracts.

First wheat genome

The International Wheat Genome Sequencing Consortium (IWGSC) released the first version of the wheat genome on August 26th, 2011. This is seen as a step toward a fully analysed wheat genome map that should help wheat breeders develop varieties with a higher yield with higher drought and disease resistance. The public release of the wheat genome data should provide a foundation for identifying genetic differences between wheat varieties.

The IWGSC was established by a group of plant scientists, breeders and growers to sequence the highly complex wheat genome.

World agricultural supply and demand updated

The United States Department of Agriculture (USDA) released updated world agricultural supply and demand estimates on Monday, September 12th, 2011.

Global wheat supplies for 2011/2012 are projected 6.8 million metric tonnes higher mostly on larger beginning stocks in Canada and increased production for Canada, EU-27, and Ukraine. Beginning stocks for Canada are raised 1.2 million metric tonnes and production is raised 2.2 million metric tonnes, both reflecting the latest estimates from Statistics Canada. EU-27 production is raised 2.1 million metric tonnes with increases for Germany, Romania, France, Spain, and Bulgaria as harvest reports and revisions to official estimates continue to indicate higher yields. Production for Ukraine is raised to 0.9 million metric tonnes based on the latest harvest reports. Other minor production revisions include 0.2-million-metric tonne increases for both Brazil and Morocco, and a 0.2-million-tonne reduction for Uzbekistan.

World wheat trade is raised slightly for 2011/2012 with increased imports projected for the United States and Uzbekistan. Global exports are also raised as higher expected shipments from Canada and EU27 more than offset reductions for the United States and Turkey. Global wheat consumption is increased 1.7 million metric tonnes with higher expected wheat feeding in Canada, China, Morocco, and Turkey more than offsetting a reduction for Russia. World wheat ending stocks for 2011/2012 are projected 5.77 million tonnes higher at 175.1 million metric tonnes. At this level, global stocks would be up from 2010/2011 and the second largest in the past decade.

Total corn supplies for 2011/2012 are lowered 442 million bushels with a 20-million-bushel reduction in carry in and a 5-million-bushel reduction in expected imports. Beginning stocks for 2011/2012 drop with small increases in 2010/11 exports and use for sweeteners reflecting the latest available data. Imports for 2011/2012 are reduced with the smaller forecast corn crop in Canada. Supplies for 2011/12 are projected to be the lowest since 2006/07.

Total corn use for 2011/2012 is projected 400 million bushels lower with tighter supplies. Projected feed and residual use is reduced 200 million bushels mostly reflecting lower expected residual disappearance with the smaller forecast crop. Corn use for ethanol is projected 100 million bushels lower with higher expected corn prices and continued weakening in the outlook for U.S. gasoline consumption as forecast by the Energy Information Administration. Corn exports for 2011/2012 are projected 100 million bushels lower with increased supplies and exports expected from Ukraine, Argentina, and Brazil. U.S. ending stocks are projected 42 million bushels lower at 672 million. The stocks-to-use ratio is projected at 5.3 percent, compared with last month’s projection of 5.4 percent. The season-average farm price is projected 30 cents per bushel higher on both ends of the range to a record $6.50 to $7.50 per bushel.

Global coarse grain supplies for 2011/2012 are projected 2.8 million metric tonnes lower with larger barley, sorghum, millet, and oats supplies only partly offsetting the reduction for corn driven by the U.S. changes. Global corn supplies are reduced 4.1 million metric tonnes as increases in foreign beginning stocks and production partly offset the reduction in U.S. supplies. Projected global corn production for 2011/2012 is lowered 5.3 million metric tonnes as a 4.3-million-metric-tonne increase in expected foreign output is outweighed by the 9.5-million-metric-tonne U.S. reduction. Brazil and Argentina production for 2011/2012 are raised 3.6 million metric tonnes and 1.4 million metric tonnes, respectively, on higher expected area with rising returns for corn in both countries. Ukraine corn production is raised 1.4 million metric tonnes based on indications for higher yields. Production is raised 0.9 million metric tonnes for EU-27 with higher expected yields in France and several countries in Eastern Europe. Production is lowered 0.9 million metric tonnes for Canada based on the latest Statistics Canada estimates. Production is also lowered 1.9 million metric tonnes for Egypt as lack of government restrictions on planting resulted in a sharp shift in acreage away from corn and into rice.

Global coarse grain trade for 2011/2012 is raised slightly with increased foreign trade in barley and corn more than offsetting the reduction in U.S. corn shipments. Barley imports are raised for Saudi Arabia and Syria with larger shipments expected from Ukraine and Russia. Corn exports are raised for Ukraine, Argentina, Brazil, and EU-27. Corn exports are lowered for Canada and Paraguay. Global corn consumption for 2011/2012 is lowered 6.6 million metric tonnes, mostly reflecting lower expected use in the United States. Foreign corn feeding and consumption are nearly unchanged. World corn ending stocks are projected up 2.6 million metric tonnes with increases in South America, Ukraine, and EU-27 more than offsetting the reduction projected for the United States.

Global oilseed production for 2011/2012 is projected at 407.7 million metric tonnes, up 1.4 million metric tonnes from last month. Production increases for soybeans, rapeseed, sunflower seed, and cottonseed are only partly offset by lower peanut production. Soybean production is projected higher for the United States and India. India’s soybean production is raised 0.6 million tonnes to a record 9.5 million due to higher planted area. Canola production for Canada is increased 0.5 million tonnes to a record 11.9 million based on higher area and yield reported in the most recent report from Statistics Canada. Harvested area is projected record high despite excessive rainfall and flooding in parts of Saskatchewan and Manitoba that prevented some area from being planted. Canada’s canola production is also raised for both the 2009 and 2010 crops based on the same report. Other changes include higher sunflower seed production for EU-27, higher cottonseed production for China, lower cottonseed production for Pakistan, and lower peanut production for India.

United States crop production updated

The United States Department of Agriculture (USDA) also released an update on crop production Monday, September 12th, 2011.

Corn production is forecast at 12.5 billion bushels, down 3% from the August forecast but up fractionally from 2010. If realized, this will be the third largest production total on record for the United States. Based on conditions as of September 1st, yields are expected to average 148.1 bushels per acre, down 4.9 bushels from the August 1 forecast and down 4.7 bushels from 2010. If realized, this will be the lowest average yield in the United States since 2005.

Soybean production is forecast at 3.09 billion bushels, up 1% from August but down 7% from last year. Based on September 1st conditions, yields are expected to average 41.8 bushels per acre, up 0.4 from last month but down 1.7 bushels from last year. Compared with last month, yield forecasts are higher in the Central Great Plains and along much of the Atlantic Coast. If realized, the forecasted yield in Nebraska will be a record high. Yield forecasts are below last month across the Southern Great Plains and portions of the Southeast as hot, dry conditions persisted during August. Area for harvest in the United States is forecast at 73.8 million acres, unchanged from August but down 4% from the same month in 2010.

Prices

The Canadian Wheat Board (CWB) released its updated Pool Return Outlook (PRO) for the 2011/2012 crop year on September 22nd, 2011.

Changes in wheat values since last month’s PRO are varied, ranging from an increase of $5 per metric tonne to a decrease of $7 per metric tonne, depending on class, grade and protein level. Milling durum values have declined between $2 and $11 per metric tonne since August 2011. Malting barley has increased by $2 per metric tonne and feed barley values are unchanged.

Wheat futures have dropped on U.S. grain exchanges since the last PRO, with Minneapolis futures off by about 80 cents per bushel and Chicago futures down by more than a dollar. Basis levels have also been under pressure as the market becomes more confident of sufficient supplies of new-crop quality, protein and volume to satisfy demand. The improved western Canadian quality profile, on the heels of a higher protein harvest on the U.S. Northern Plains, is contributing to the weaker Minneapolis futures and declining premiums for both protein and quality attributes. The overall wheat market has also fallen due to continued positive production and yields in the European Union (EU) and Black Sea region–including Russia, Ukraine and Kazakhstan. As stated by the U.S. Department of Agriculture (USDA), world production is estimated at 679 million tonnes, with ending stocks at 194.6 million metric tonnes. These are significant numbers that will continue to temper the market throughout the 2011/2012 marketing year.

Durum prices have been more resilient than wheat prices during the past month, but have also moved lower. The U.S. crop is estimated at 58 million bushels, but the USDA cut back on exports and usage to increase its ending-stocks estimate to 28 million bushels–roughly double the total of the August estimate. North American prices remain strong and provide strong incentive for durum planting intentions. Canadian durum prospects are favourable, with expectations of a four-million metric tonne crop with a much improved year-on-year quality profile. Although the Canadian dollar remains under pressure, it has not depreciated to the same degree as the euro. While demand remains strong in the Mediterranean basin for durum, the weaker euro has had the dual effect of increased EU competiveness and decreased buying power for North American durum.

Feed barley values have remained strong over the last month, although the market has been relatively quiet. Feed barley spreads have remained tight between Black Sea FOB values and other origins, helping support the overall price structure. Even with corn futures decreasing throughout September, feed barley remains a cheaper alternative in many regions. This price differential is expected to continue throughout 2011/2012 based on tight U.S. corn supplies, which will increase barley feeding globally. Even in the U.S., where corn is king, feeders will be looking to substitute grains when corn becomes too pricey or difficult to source. Barley feeding is expected to remain very strong in Europe and the Black Sea region where cattle, hog and poultry production is more flexible in terms of feed substitution.

Good harvest weather throughout September has helped ensure the quality of this year’s malting barley crop in Canada. Demand for new-crop supplies is expected to be strong, especially in the U.S., where malting barley production was limited due to a poor growing season on the Northern Plains. Internationally, some demand will be deflected to Canada from Europe, where malting barley quality was less than ideal due to rains at harvest in Germany and Denmark. Demand from China will be strong again this year. However, a large import program throughout the last quarter will allow China the opportunity to defer some purchases into the period of Southern Hemisphere harvest. Malting barley values are forecast to remain strong until the harvest in Australia and Argentina begins in December. With large barley crops in the Southern Hemisphere, even average malting barley selection rates in both countries would provide a significant increase in malting barley supplies over last year. As with the wheat and durum PROs this month, the decrease in the value of the Canadian dollar is also supportive of projections for barley returns.

Future contracts for the major grains and oilseeds look brighter than they were a year ago. This can be explained by expectations that grain and oilseed supplies will probably not meet demand before the next harvest. In the short-term, however, future contracts are decreasing compared to the previous month. This situation can be explained by the drop-off in speculative buying, speculative liquidation and the general mood in the financial markets of the world.

Source: Statistics Canada

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In the 12 months to August, both the livestock and animal product index (+12.5%) and the total crops index (+3.4%) recorded increases.

Compared with August 2010, advances were recorded in all livestock commodities, ranging from 3.3% for dairy to 19.4% for poultry.

The cattle and calves index (+16.0%) and the hogs index (+13.7%) are the largest contributors to the livestock and animal products index. Except for a dip in May 2011 of the hog index (-0.5%), both of these commodities have continued their double digit growth since August 2010. Lower inventories of cattle and hogs in North America and higher feed grain costs have contributed to higher livestock and animal product prices.

Oilseed prices (+24.6%) continue to be the largest contributor to the advance in crop prices, followed by specialty crops (+22.3%) and grains (+6.5%). The year-over-year increase in the crops index was moderated by lower prices for fruit (-7.7%) and vegetables (-3.8%).

On a monthly basis, following no changes in July, the August index rose 0.7%. An increase in livestock and animal products index was partially offset by a drop in the crops index.

Source: Statistics Canada

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The August Saskatchewan non-board wheat price was $192.91 per tonne, down 4.9% from July but up 35.4% from August 2010 when the price was $142.50.

The Quebec hogs price in August was $93.24 per hundredweight, up 10.6% from July and 19.3% higher than August 2010 when it stood at $78.17.

Source: Statistics Canada

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Total wheat production up

Total wheat production in the West is expected to reach 21.7 million metric tonnes in 2011, up 3.0% from 2010. Yield has been flat for the past four years and 2011 sees this trend continue with an anticipated yield of 40.1 bushels per acre.

The rise in production was mainly attributable to an increase in durum wheat. Durum wheat production is expected to increase 30.2% from 2010 to 3.9 million tonnes, on the strength of higher anticipated harvested area, up 27.5%, and in expected yield, from 36.1 to 36.9 bushels per acre in 2011.

Canola production expected to increase

Western farmers reported that canola production could reach 12.8 million tonnes, up 1.1% from 2010 production. The advance is the result of a record harvested area of 17.9 million acres, up 6.3% over 2010.

However, the expected yield of 31.6 bushels per acre represents a decline of 4.8% from 2010. Of the four western provinces, only Manitoba expects its canola production to decline from 2010 levels.

Barley production rises

Despite a lower harvested area compared with 2010, Canadian farmers anticipate that increased yields of barley will lead to a production of 7.9 million tonnes, up 3.8% or 292 600 tonnes from 2010.

Barley yields are expected to reach 62.5 bushels per acre in 2011, up 5.6% from 2010. The increase is concentrated in Saskatchewan, where production is expected to reach 2.5 million tonnes in 2011, up from 1.9 million tonnes in 2010.

Smaller corn for grain harvest for Ontario and Quebec farmers

In Ontario, production estimates for corn for grain were down 13.8% from 2010 to 6.7 million tonnes, the result of a 23.4 bushel per acre drop in yield to 140.6 bushels per acre. Harvested area should remain almost unchanged from 2010 at 1.9 million acres.

Similarly, Quebec farmers expect corn for grain production to fall 12.9% to 3.0 million tonnes in 2011, an anticipated decrease of 440 000 tonnes from the 3.4 million tonnes in 2010. The expected drop would primarily be the result of a 12.2% decline in yield to 130.0 bushels per acre, from 148.0 bushels per acre in 2010. The decline of 0.8% in seeded area for corn for grain represents the fourth consecutive year that Quebec farmers have seeded fewer acres to this crop.

Soybean national production expected to fall from record levels in 2010

At the national level, soybean production is expected to decrease from 4.3 million tonnes in 2010 to 3.9 million tonnes. Most of this decline comes from Ontario where, despite an amount of harvested acres virtually unchanged from 2010, yield is expected to drop by 5.5 bushels per acre to 40.5 bushels per acre. Manitoba farmers also expect a lower average yield, from 31.4 bushels per acre in 2010 to 25.7 bushels per acre in 2011.

Source: Statistics Canada

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Statistics Canada surveyed 15,200 Canadian farmers between July 25 and August 2, 2011 and published the first production estimates on August 24. Prairie farmers anticipated a record harvest of canola, as well as higher volumes of barley, oats and wheat compared to 2010. Farmers in Ontario and Quebec anticipated a smaller crop of corn for grain in 2011.

Western Canadian farmers expected canola production to increase by 11.2% to 13.1 million metric tonnes as a result of record harvested acres. Harvested area was estimated at 17.9 million acres, up 11.6% from 2010`s record acres. A yield of 32.3 bushels per acre was reported.

Total Canadian wheat production was estimated to reach 24.1 million metric tonnes in 2011. This is an increase of 4.0% over 2010, when 23.2 million metric tonnes were harvested. In spite of planting delays throughout much of Manitoba and Saskatchewan, Canadian farmers anticipated harvesting 21.1 million acres of wheat, approximately 3.4% more than in 2010.

Barley production in the Prairies was estimated to rise 11.1% in 2011 to 7.7 million metric tonnes. Yields were expected to increase by 7.3% to 63.6 bushels per acre. Farmers predicted harvesting 5.6 million acres, a rise of 200,000 acres from 2010. Prairie oat production was also expected to be higher as larger yields were estimated. Production could reach 2.5 million metric tonnes based on a yield of 77.4 bushels per acre and harvested area of 2.1 million acres.

Dry pea production in Saskatchewan and Alberta was expected to reach 2.1 million metric tonnes. This was a 25.6% decrease from 2010 when 2.9 million metric tonnes were produced. Harvested area was estimated to be down 33.0% to 2.2 million metric tonnes as a result of spring flooding throughout much of the pulse growing area of Saskatchewan. Lentil acres also experienced a large reduction as producers anticipated harvesting 2.5 million acres, 23.4% less than 2010. A 7.4% increase in yield helped to offset some of the decrease in acres but production was still expected to decline by 17.8% to 1.6 million metric tonnes.

Approximately 2.9 million acres of corn for grain were expected to be harvested. This would be a slight decline from 2010 when almost 3.0 million acres were harvested. Total production was estimated at just under 10.0 million metric tonnes. In Quebec, total corn for grain production was anticipated to be 2.9 million metric tonnes, down 13.8% from 2010. Production estimates for Ontario were expected to decrease 14.8% to 6.6 million metric tonnes. Yields in both provinces were reported to be down from 2010 after a hot, dry growing season.

In spite of a 2.4% increase in harvested area, production of soybeans was expected to decline by 11.2% to 3.9 million metric tonnes. Yield estimates were down 13.4% in comparison to 2010. Quebec production was estimated to remain virtually unchanged while production in Ontario could decrease 15.2% to 2.6 million metric tonnes. Manitoba farmers expected to produce 405,500 metric tonnes.

World agricultural supply and demand updated

The United States Department of Agriculture (USDA) released updated world agricultural supply and demand estimates on Thursday, August 11.

Global wheat supplies for 2011/2012 were raised 11.4 million metric tonnes to 863.8 million metric tonnes because of higher beginning stocks and a sharp increase in production. World wheat production was increased by 9.7 million metric tonnes to 672.1 million metric tonnes. Larger production for FSU-12, India, China and EU-27 more than offset reduced production in Argentina. Imports were projected to be 3.0 million metric tonnes higher with increases for South Korea, Algeria, Indonesia, Syria and Kenya. Higher than expected feeding in EU-27, China, Canada, South Korea and the United States resulted in an increase in world feeding estimates to 127.9 million metric tonnes. An increase in exports of 4.0 million metric tonnes for Russia and 1.5 million metric tonnes for Ukraine more than offset a decrease of 1.5 million metric tonnes for Argentina, 1.4 million metric tonnes for the United States and 1.0 million metric tonnes for Canada. The net result was an increase in global exports of 1.3 million metric tonnes to 131.3 million metric tonnes. World wheat ending stocks were projected at 6.7 million metric tonnes higher at 188.9 million metric tonnes.

For the 2011/12 crop year, global coarse grain supplies were lowered after a 3.6 million metric tonne increase in beginning stocks was more than offset by a 14.0 million metric tonne reduction in production. The USDA estimated global supplies to be 1,297.2 million metric tonnes. The decline in global production was a result of reduced corn and sorghum production in the United States. Foreign corn, barley and oats production were all expected to be higher. Global exports for 2011/12 decreased slightly as reduced US corn and sorghum exports were mostly offset by higher than expected foreign corn and barley shipments. Global coarse grain consumption was estimated to be 1,150.0 million metric tonnes, a decrease of 8.4 million metric tonnes from last month, because of lower world corn feed and residual use.

Global oilseed production for 2011/12 was projected at 451.4 million metric tonnes. This represented a 4.1 million metric tonne decrease from estimates the previous month and was a result of a decline in the US soybean crop. Reductions for soybeans, rapeseed and cottonseed only partly offset increases for sunflower seed and peanut production.

MGEX changes Hard Red Spring Wheat contract

The Minneapolis Grain Exchange (MGEX) Board of Directors removed the United States origin condition for wheat delivered against its Hard Red Spring Wheat (HRSW) futures contract, effective no later than the May 2013 contract month. By removing the condition, MGEX allows HRSW from outside of the United States to be delivered on the contract, provided it meets contract specifications.

According to Richard A. Dusek, Chairman on the Contracts Committee and Second Vice Chairperson of the MGEX Board, the removal of the delivery condition was the first step of a multi-phase approach by the Contracts Committee in ensuring that the MGEX Hard Red Spring Wheat contract is adaptable to the global marketplace. Mark G. Bagan, President and CEO, said in a statement that this change is the first step envisioned for enhancing the appeal of the HRSW futures contract to global market participants by ensuring that it meets the needs of buyers and sellers of spring wheat from around the world.

First ship arrives at Port of Churchill

The first ship, the MV Pacific Bulker, arrived at the Port of Churchill at the beginning of August to load approximately 27,000 tonnes of Canada Western Red Spring wheat destined for Nigeria.

In 2010, the port exported 656,298 tonnes of grain, second only to the record 729,000 tonnes in 1977. Six hundred thousand tonnes of that grain were wheat and durum exported by the CWB. For the first time in three years, non-board crops were also handled by the port, including 43,000 tonnes of canola and 12,000 tonnes of human-grade dry peas.

ICE Futures Canada to list serial options on canola futures

ICE (IntercontinentalExchange) Futures Canada announced that, effective on Trade Date September 26, 2011, serial options on ICE canola futures would be list for trading on the ICE trading platform. On Trade Date September 26, serial options contracts would be listed for December 2011, February 2012 and September 2012. Going forward, the canola options listing cycle would be the nearest six regular options months plus the nearest September option on November futures plus the nearest two serial option months, excluding September.

Traditionally, options on futures contracts have been listed in months corresponding to the underlying futures contract and expire near the end of the month preceding the futures delivery month. It is also possible to list additional options contracts, with differing expiry dates, for the same underlying futures contracts. These options contracts are referred to as serial options. One feature of these additional options is that they facilitate trading at smaller premiums than regular options contracts, due to their shorter time to expiry.

Alliance Grain Traders buy Australia pulse processor

Alliance Grain Traders Inc. (AGT) announced the acquisition of all assets of Canz Commodities, a chickpea and pulse processor in Narrabri, New South Wales, Australia. The assets included real property, storage and related handling equipment and a processing plant for pulses and grains, specializing in desi and Kabuli chickpeas, faba beans, mung beans and albus lupins. The Narrabri facility is located 500 kilometres from Sydney and is equipped with direct rail access with three times dedicated weekly container train service direct from the facility to Sydney.

According to a release from AGT, the total investment, including the cash acquisition prices and a budget for improvements, was CAN$8.0 million. The facility is currently operational with capital expansions and improvements planned to commence immediately.

Next generation of biotech crops undergo field trials

Last month, the Canadian Food Inspection Agency granted regulatory approval to a drought tolerant corn, MON 87460, developed by Monsanto and BASF. MON 87460 could become the first drought tolerant crop grown in North America that was developed through a combination of breeding and biotechnology.

Monsanto plans to carry out on-farm field trials of MON 87460 in the Western Great Plains Region of the United States in 2012, once regulatory approval is granted. Field trials were already underway in Canada.

MON 87460 represents the first generation of Monsanto’s drought tolerance technology. It is targeted at producers in the dryland region of the US Corn Belt where annual water shortages are experienced. The second generation of drought tolerant corn, which is halfway through the company’s research and development process, may be better suited for Canadian producers because it is designed to provide yield stability during intermittent drought.

Traits combating environmental stresses are still five to ten years away from commercialization in canola and wheat.

Prices

The Canadian Wheat Board (CWB) released its updated Pool Return Outlook (PRO) for the 2011/12 crop year on August 25. Wheat values increased from last month by between $12 and $18 per metric tonne, depending on class, grade and protein level. Durum wheat values went up between $6 and $16 per metric tonne. Pool A feed barley PRO was raised by $12 per metric tonne while malting barley was unchanged from last month.

Hot weather supported the US corn futures market into August as traders remained concerned about reduced output. Many believed that corn suffered damage due to high temperatures during a critical period of development in July. Strength in the US dollar and steep losses in equities and crude oil weighed on prices, limiting some of the early gains. Traders moved to reduce risk over concerns about the world economy. Following the release of USDA’s monthly supply and demand report on August 11, futures prices closed sharply higher as deeper than expected cuts were made to the agency’s output estimate for the United States. US corn futures continued to be supported as the month progressed by traders factoring in potential crop losses while attempting to find price levels that would slow demand for new crop inventories. Supply was expected to shrink down to precariously low levels. Released August 23, the weekly USDA crop progress report showed greater than expected crop deterioration. The declining yield expectations and worries about tight supplies underpinned the market. While demand was slowing at current high prices, supply was decreasing at a faster rate. Near the end of the month, fresh export demand added further support to futures’ prices.

US wheat futures stumbled under pressure from broad weakness in commodities and equities as investors fled riskier assets. Declining demand because of increased competition for export business from Russia also pressured prices lower. Some spillover support from corn futures kept wheat prices from falling too far. Tighter corn supplies and higher corn prices indicated livestock producers could increase demand for wheat for feed. Concerns about tightening supplies of high quality wheat also underpinned prices, most notably on the Minneapolis Grain Exchange (MGEX). In its August 11 supply and demand report release, the USDA reduced its harvest estimate for the protein-rich spring wheat crop. At mid-month, US wheat futures moved higher on news of fresh export demand and spillover support from corn futures. The announcement of a weekend sale of US wheat to Saudi Arabia and news of Algeria buying wheat in the world market was supportive. Minneapolis spring wheat prices rose to two-month highs on crop and acreage concerns. Disappointing yield reports from spring wheat harvests and concerns that the United States will harvest less acres amid higher amounts of acres farmers took preventative planting insurance on combined to increase worries of smaller crop potential. As the harvest got underway in the Northern Plains and yields emerged, worries about a smaller than expected spring wheat crop pushed prices higher on MGEX. Concerns over the hard red winter crop in the Southern Plains and delayed harvest operations in Europe also boosted the market.

Ongoing concerns about crop production potential supported US soybean futures throughout much of August. Potential yield reductions from hot Midwest weather as the crop headed into its critical pod fill stage underpinned the market. Pushing prices lower were long range forecasts cooler and wetter conditions, declines in crude oil and equity markets and fears over a slowing United States and world economy. US soybean futures gained back some of their declines after the August 11release of USDA’s supply and demand estimates. Government crop forecasts projected that demand would outpace new crop production. The lower than expected output and yield forecasts were supportive for soy prices because it showed the need for demand rationing and incentives for South American farmers to produce another record crop in 2012. Traders re-established risk premium in the market over concerns about key areas in the Midwest lacking sufficient soil moisture during the crop reproductive phase.

Winnipeg canola futures started August on a weaker note as elevator company hedge selling, sentiment that canola crops in Western Canada were in mostly good shape, ongoing concerns about the state of the world economy, steady farmer selling and chart based liquidation orders. Some underlying support came from steady domestic crusher demand and the pricing of old export business. Futures’ prices finished with strong gains on August 11, supported by the smaller than expected production estimate for US corn and soybeans from USDA. Canola moved higher with spillover support from Chicago Board of Trade (CBOT) soybean and soyoil futures. Buy-stop orders were also triggered, further amplifying the gains. Tempering some of the advances was the development of the Western Canadian canola crop. The early stages of swathing were underway in some regions of the Prairies. End-users were holding back purchases in hopes new crop values would be down from current levels. Canola futures followed outside markets as the month progressed, moving with the CBOT soy complex, Malaysian palm oil and European rapeseed futures. The slowing pace of farmer selling underpinned prices, as did steady demand from domestic crushers and pricing of old export business. The ongoing development of canola crops across the Canadian Prairies and the approaching harvest limited some of the upside price potential.

Field pea markets maintained a firm note throughout the summer, supported by worries over the potential size of this year’s crop globally and relatively tight stocks at the grower level. The availability of new crop product from France and Ukraine as harvest operations got underway at the end of July weakened prices somewhat. However, while yields in Europe were thought to be better than expected, they would not make up for the reduction in seeded acres. Total European production was expected to be down over last year. Doubts about India’s ability to maintain last year’s pulse production levels for the kharif season provided some added support to the market. By mid-month, seeding of pulse crops was 11% behind last year. Improving rainfall levels during the monsoon season could stimulate a last minute attempt to expand pulse area in the country. The slow start to this year’s North American pea harvest and worries about the size of the European crop added strength to the market in August. However, there was evidence of a weaker sentiment in yellow peas as some processors temporarily withdrew from the market in response to rising grower selling interest and limited end user buying interest.

Lentil markets maintained a quiet tone throughout much of the July and August. The summer holiday period is normally associated with a steep reduction in buying interest in Europe and other northern hemisphere countries. The late start to this year’s crop in both Canada and the United States added uncertainty to the market and increased the risk of yield and quality losses. Many processors in both Canada and the United States were unwillingly to offer new crop product until harvest started in mid-August. The North American harvest gained momentum as August progressed. Initial samples of new crop product were of much higher quality than last year’s average.

International chickpea markets remained strong throughout August as available supplies from net exporting nations continued to tighten. Poor crops in Australia and Turkey have led to an increase in the value of chickpeas in Western Canada. Markets were anticipating the North American harvest to help relieve some demand pressure until new crop supplies are available from Australia later in the year and from India in the new year.

Source: Statistics Canada

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In the 12 months to July, both the total crops index (19.4%) and the livestock and animal product index (10.4%) recorded increases. The year-over-year upward trend started in September 2010 for the crops index and in May 2010 for the livestock and animal products index.

The largest contributors to the advance in crop prices were oilseeds (+34.3%) and grains (+30.1%). The year-over-year increase of the crops index was moderated by lower prices for potatoes (-4.5%) and vegetables (-2.5%).

Canola, Canada’s largest oilseed crop, set record crush levels for the August 2010 to July 2011 crop year, with 6.3 million tonnes of canola crushed, up 31.8% from the previous year’s record.

Compared with July 2010, increases were recorded in all livestock commodities, ranging from 1.8% for dairy to 16.7% for poultry. The cattle and calves index (+15.7%), the largest contributor to the livestock and animal products index, continued its strong advance, with double-digit growth since August 2010.

On a monthly basis, following an increase in June, the July index fell 0.1%, the second decrease since December 2010. Both the crops index and the livestock and animal products index edged down in July.

Source: Statistics Canada

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Total stocks of wheat decreased 8.2% to 7.2 million tonnes, mostly the result of an 18.8% decline in on-farm stocks. Commercial stocks were little changed.

Much of the decrease occurred in durum wheat, where total stocks fell 41.5% during the year to 1.6 million tonnes.

Total stocks of barley declined 44.2% to 1.4 million tonnes. Barley production fell in 2010, as a result of a decline in harvested area. Declines of on-farm stocks occurred in all four western provinces, but were most pronounced in Manitoba and Saskatchewan.

Total stocks of canola decreased 19.2% to 1.8 million tonnes. This was primarily a result of on-farm stocks, which declined by 33.9% to 820 000 tonnes. Despite the decline, total canola stocks remain at the five-year average (2006 to 2010) of 1.8 million tonnes.

Overall stocks of oats fell 34.3% to 769 000 tonnes. This follows a sharp decline in oat production in 2010. On-farm stocks of oats were down 37.2% while commercial stocks fell 24.2%.

Source: Statistics Canada

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The July Ontario grain corn price was $261.36 per tonne, up 7.2% from June and 70.6% higher than July 2010 when the price was $153.19.

The July slaughter cattle price for Alberta was $94.79 per hundredweight, up 1.4% from June and 14.7% higher compared with July 2010 when the price was $82.62.

Source: Statistics Canada

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