Canada: Outlook for Principal Field Crops, 2020-11-20

Canada: Outlook for Field Crops (PDF version, 406 KB)

Historical Data

For the 2020-2021 crop year, the outlook incorporates yield estimates from Statistics Canadas (STC’s) September 14, 2020 report, which are based on a model that incorporates coarse resolution satellite data from STC’s Crop Condition Assessment Program, data from STC’s field crop reporting series, and agro-climatic data.

Total field crop production is estimated at 98.1 million tonnes (Mt), 4% higher than in 2019-2020 and if realized the largest harvest on record, surpassing marginally the 2013 record and 6% above the previous five-year average. Production is forecast to increase for most crops, notably for Durum (22%), Lentils (29%), Oats (6%) and Corn (5%), while production is expected to decrease for Chickpeas (-5%), Barley (-1%), and Canola (-1%).

Total supply is forecast to increase slightly to 114.6 (Mt), as higher production is partially offset by lower carry-in stocks and a decrease in imports. Exports are forecast to remain strong, increasing 3% to 53.8Mt. Total carry-out stocks are forecast to increase marginally to 14.6 Mt. Grain prices in Canada are forecast to continue to be supported by the expected relatively low value of the Canadian dollar and continued strong world demand.

The economic outlook for the world and Canadian grain markets is expected to continue to be impacted by the domestic and international uncertainty caused by COVID-19. The next official estimates of field crop production will be available December 3, 2020, when STC publishes the final estimates of yield and production for 2020-21.

Wheat

Durum

For 2020-21, production is estimated by STC at 6.13 million tonnes (Mt), a 22% increase from 2019-20, as the 16% increase in seeded area was compounded by higher yields and a return to normal abandonment rate. This more than offset the lower carry-in stocks to bring total supply up marginally to 6.92 Mt.

Exports are expected to decrease slightly from the record highs experienced last year, and domestic use is expected to fall because there is less low quality durum available for feed use. Carry-out stocks are forecast to increase slightly to 0.8 Mt, 42% lower than the past five year average of 1.39 Mt.

The International Grain Council (IGC) revised their forecast for world durum production, down by 1 Mt from the September report, to 34 Mt. This is still 1% more than 2019-2020 due to declines in the EU (-3%) and North Africa (-17%) offset by increased production in Canada (+22%), Turkey (+8%) and the United States (+28%). According to the United States Department of Agriculture (USDA), US durum production for 2020-21 is forecast to rise 26% to 1.9 Mt.

World supply is expected to fall 2% to 42.9 Mt because of lower carry-in stocks (-11%). Use is expected to increase slightly (+2%) due to increased feed use (+8%). Carry-out stocks are expected to drop 15% over 2019-2020 to 7.6 Mt, the lowest since 2014-2015.

The average Canadian crop year producer price for durum is forecast to remain strong, on par with the 2019-20 average price in Saskatchewan for No. 1 CWAD 13% protein at $270/tonne.

Wheat (excluding durum)

For 2020-21, Production is estimated by STC to increase by 2% to 28.01 Mt, as a 3% decrease in seeded area was more than offset by lower abandonment and higher yields. Spring wheat production is estimated to fall by 3% to 25.16 Mt and winter wheat production to rise by 68% to 2.85 Mt. The wheat harvest is complete with the provinces reporting average to above average quality thanks to better weather conditions at time of harvest.

Estimated production by class of wheat, with change over 2019-20 production in brackets: winter wheat (hard red, soft red and soft white) 2,849 thousand tonnes (Kt) (+68%); Canada Western Red Spring (CWRS), premium quality hard wheat, 21,000 Kt (-5%); Canada Prairie Spring (CPS) 1,994 Kt (+33%), Canada Northern Hard Red Spring (CNHR) 801 Kt (+10%); soft white spring (CWSWS) 481 Kt (-12%), other western spring wheat 314 Kt (+21%), eastern spring wheat, mainly hard red spring (CERS), 571 Kt (+23%).

Total supply is estimated to increase by 4% due to higher carry-in stocks (+13%) and increased production. Exports are forecast to rise by 2% due to increased demand from China.

The IGC is forecasting world production of all wheat at 763.9 Mt, relatively on par with 2019-2020 (+0.1%) due to production declines in Europe, USA and Argentina, offset by increases in Russia and Australia. Excluding China, total supply is expected to increase slightly to 778.3 Mt, 1% more than 2019-2020 due to higher carry-in stocks. Total use is also forecast to rise marginally to 619.4 Mt with higher food use offset by lower feed and industrial use. Carry-out stocks are forecast to increase by 2% to 151.5 Mt, 17% higher than the past five year average of 4.68 Mt.

US all wheat production is estimated to fall by 5% from 2019-20 to 49.7 Mt, according to USDA. Imports are forecast to increase by 19% to 3.4 Mt. Supply is estimated to fall by 4% to 81.1 Mt. Exports are forecast increase just 1% to 26.5 Mt. Carry-out stocks are forecast to drop 15% to 23.9 Mt.

Average Canadian producer prices for wheat for the crop year are forecast to remain on par with 2019-20 levels, with the average price in Saskatchewan for No. 1 CWRS 13.5% protein at $226/tonne.

Coarse grains

Barley

For 2020-21, total barley production across Canada is estimated by Statistics Canada (STC) to decrease by 1% from 2019-20 to 10.3 million tonnes (Mt), on expectations for a slightly higher area harvested, despite estimates for lower average yields. If materialized, the production would be 17% above the previous five-year average. Combined with higher carry-in stocks, Canadian barley supply is forecast at 11.3 Mt, roughly the same level as last year.

Harvesting of barley in Western Canada has finished. The three Prairie provinces all reported good quality at provincial level in their final crop reports. The average provincial yield for barley in the top two barley producing provinces, Alberta and Saskatchewan, is reported at 4.00 Mt/hectare and 3.60 Mt/hectare, respectively, versus STC’s estimates of 3.96 Mt/hectare and 3.39 Mt/hectare for these two provinces, respectively.

Exports are expected to remain strong throughout the year against a backdrop of strong demand for animal feed from the international market. STC and the Canadian Grain Commission (CGC) have reported a strong export pace since the start of the year. Domestic use is expected to decline, mainly due to lower feed consumption in anticipation of a reduction in the backlog of livestock and good supplies of other feed grains. Industrial use is expected to recover, but will still be lower than prior-year levels. Carry-out stocks are expected to rise by 5% from last year and to be 27% lower than the previous five-year average.

The average price of feed barley for 2020-21 is expected to rise by 3% from 2019-20 to $240/tonne, based on cumulative average price for the current crop year compared to a year ago, as a result of strong demand for exports and domestic feed use.

World barley supply for 2020-21 is anticipated to increase by 1% to 203 Mt, particularly due to a increase of 1.8 Mt or 17% in output from Australia, as well as a minor rise in output from the EU and Kazakhstan, and an increase of 3% from Russia, according to the United States Department of Agriculture (USDA). However, barley production in Ukraine is estimated to fall sharply by more than 1.5 Mt or 16% from the previous year. Argentina projects to produce less barley in 2020-21. World barley consumption is forecast to expand by 1% to 156 Mt on higher feed demand, as well as food, seed and industrial use, mainly by China and the EU. World demand for barley imports is forecast to increase by 2% to 27.3 Mt. World carry-out stocks are expected to rise marginally from last year but still reach a recent four-year high due to an increase in Australia, Iran, Russia and Saudi Arabia.

Corn

For 2020-21, Canadian corn production is estimated to increase by 5% from 2019-20 to 14 Mt on expected good yields, despite the forecasted lower area planted. If materialized, production would be 2% above the previous five-year average. Imports are expected to decrease on expected good grain corn production prospects, both in Eastern and Western Canada. At 17.7 Mt, total supply is forecast to be 1% higher than the previous year.

Domestic use is anticipated to remain at the same level as last year due to a decline in feed use, which is offset by an expected partial increase in industrial use. Exports are expected to be weak due to the sluggish pace so far this year, but increase marginally on good domestic supply and on the expectation of continued strong global demand. Carry-out stocks are forecast to fall slightly from the 2019-20 record level to 2.5 Mt and be 21% above the prior five-year average.

The average price of Chatham corn for 2020-21 is expected to hold steady at $195/tonne, as the forecast for an increase in US corn prices is expected to be offset by a declining basis, which reflects ample supplies relative to limited demand of corn in Ontario.

The USDA trimmed down the 2020-21 production estimates for some major corn exporters, including the EU, Russia, Ukraine and the US, led by Ukraine whose corn output is estimated to drop sharply by 8 Mt or 22% from the October forecasts, followed by the EU whose corn output is estimated to fall by almost 2 Mt or 3% from the October forecasts. Compared to last year, Ukraine corn production is estimated to decline by 21% and 4% for the EU. World demand for corn, particularly from the livestock sector of Asian countries, such as China, and countries in the Middle East, has been revised up and is 2% higher than last year. As a result, global carry-out stocks are expected to reach their lowest level in six years, led by China whose carry-out stocks are expected to decrease by 9 Mt from last year to a six-year low and, for the US whose carry-out stocks are expected to decrease by 7.5 Mt from last year to a seven-year low.

The 2020-21 corn supplies in the US were trimmed by 1% from the October estimates, however, it is still 4% higher than last year, but slightly lower than the average for the previous four years. Along with strong demand, particularly from solid export sales, carry-out stocks for the US corn are expected to reach a five-year low. The projection for the US 2020-21 corn weighted average price received by farmers was lifted to US$4.00/bushel(bu) from US$3.60/bu in the October updates and it is the highest in the last seven years.

Oats

For 2020-21, Canadian oat production is estimated to increase by 7% to 4.5 Mt on expected higher area and good yields. If materialized, it would be the second largest output on record since 1983. Total supply is forecast to be 6% higher than the previous year.

Harvesting of oats in Western Canada has finished. The three Prairie provinces all reported good quality at provincial levels in their final crop reports. The average provincial yield for oats in Alberta and Saskatchewan is reported at 3.25 Mt/hectare and 3.28 Mt/hectare, respectively, versus STC’s estimates of 3.76 Mt/hectare and 3.55 Mt/hectare for these two provinces, respectively.

Exports are projected to increase on the strong start for oat grain exports and record pace for product exports. Total domestic use is expected to rise, largely on higher feed use. Carry-out stocks are forecast to increase significantly from the previous year on plentiful supplies.

The CBOT oat futures price for 2020-21 is expected to remain the same as the previous year, at $270/tonne, underpinned by strong demand for the time being, albeit ample supplies in Canada, the US and the world’s major exporting countries.

The 2020-21 oat production in the world’s main oat producing countries are expected to rise, with a sharp increase of 86% for Australia and 14% for the EU. Global oat supply for 2020-21 is expected to recover from the year-earlier lows to reach the highest level in more than a decade. Total demand, including feed and food consumption, is expected to increase by 7% to 24.3 Mt, but more slowly than the increase in supplies, which will result an increase of 33% in world ending stocks.

Rye

For 2020-21, Canadian rye production is estimated to increase by 29% to 431 thousand tonnes (Kt), due to higher area offsetting lower yield. Supply is expected to increase by 23% to 473 Kt, the highest in recent three years.

Saskatchewan, the top rye producing province, reported that this year’s rye harvest was 2.51 tonnes/hectare, while STC’s estimate was 2.13 tons per hectare.

Exports are estimated to fall by 21% to 130 Kt for this year, based on the current export pace reported by STC and CGC. Domestic use is expected to increase on relatively cheap prices and good supplies. Carry-out stocks are projected to rise sharply due to bumper supplies. Rye prices are expected to fall significantly from 2019-20, due to ample supplies in Canada, the US and the world major exporting countries.

World rye supplies are forecast to increase and most of the increases are located in the major exporting countries. World consumption is anticipated to increase on expanded feed use, as well as food, seed and industrial use. Demand for imports from the major importing countries is expected to fall. World carry-out stocks are forecast to increase and most of the increases are located in the major exporting countries.

Oilseeds

Canola

For 2020-21, Canadian canola production is estimated at 19.4 million tonnes (Mt), on a marginal decline in seeded area and a 1% drop in yields to 2.3 t/ha. By province, 10.1 Mt of canola is estimated to have been grown in Saskatchewan, 6.0 Mt in Alberta and Manitoba is estimated to have produced 3.2 Mt of canola. Total supplies are estimated down by 7%, to 22.6Mt, as the marginal decline in output is supplemented by lower carry-in stocks and stable imports.

Domestic crush is forecast to decline marginally from last year to 9.8 Mt due to tight domestic supplies. For the first two months of the crop year Statistics Canada reported a domestic canola crush of 1.6 Mt, on par with the amount crushed during August and September of 2019. Exports are forecast to increase marginally for the crop year, to 10.2 Mt, on support from strong world demand. Exports to date are running about 50% ahead of this time last year on strong early crop year shipments. The export pace will need to slow down later in the crop year as Canadian supplies of canola tighten, barring an unexpected significant upward revision in the production estimate.

Carry-out stocks are forecast to tighten to 2.3 Mt, for a stock-use-ratio of 11%, while canola prices are estimated at $560/t on support from the rally in world oilseed, vegetable oil and protein meal prices. This is a 16% increase from the 2019-20 canola price of $484/t and a 10% rise from the 5 year average of $511/t.

World trade in canola is forecast to decline slightly to 15.1 Mt, by the USDA due to the tightening of world supplies. The European Union is projected as the world’s largest importer of canola-rapeseed, at 5.8 Mt, a slight decline from the 6.3 Mt imported last year but well up from the 4.2 Mt shipped into the EU-28 in 2018-19. Chinese imports of canola-rapeseed are predicted to remain stable with last year at 2.5 Mt but remain well below the 3.5 Mt imported in 2018-19 as their hog herd continues to recover from African Swine Fever. Japanese imports of canola-rapeseed are steady at 2.3 Mt. Canadian imports of canola are predicted to hold steady at 0.2 Mt as the catchment area or delivery area of a significant crush plant extends into the US.

World exports of canola are predicted to decline by almost 0.7 Mt from last year due to the tightening of world canola-rapeseed supplies, although shipments are expected to be well above the 14.3 Mt traded in 2018-19. Canada, at 9.8 Mt, is expected to account for nearly two-thirds of the world’s exports in canola-rapeseed. The 2nd largest exporter is “other”, namely countries from the former Soviet Union, Ukraine and Russia at 2.1 Mt and 0.5 Mt, respectively, and Australia at 2.4 Mt.

Flaxseed

For 2020-21, Canadian flaxseed production is estimated by STC at 0.55 Mt based on a seeded area of 0.37 Mha and slightly above normal yields of 1.6 t/ha. Most of Canada’s flaxseed is grown in Saskatchewan with an expected output of 0.44 Mt while an additional 0.08 Mt are expected to have been grown in Manitoba. Supplies are forecast to increase by 10% to 0.63 Mt as the higher output offsets the virtually unchanged carry-in stocks and modest decline in imports.

Exports are forecast up by 29% from 2019-20, to 0.45 Mt, on higher available supplies and strong world oilseed demand. Total domestic use is forecast to fall sharply to 0.05 Mt on a drop in feed, waste and dockage while carry-out stocks are forecast at 0.13 Mt. Prices are forecast to rise by $100/t, or about 20% from last year, to $620/t, on support from a counter-seasonal rally in oilseed prices worldwide. The post-harvest rally in flaxseed prices has been significant, creating concerns of a vulnerability to a sharp correction. While information is limited, elevators are offering bids at near current levels for the remainder of the crop year, supporting ideas that the price rally is based on solid long term supply-demand fundamentals and is not a temporary market bubble.

Soybeans

For 2020-21, production is forecast at 6.2 Mt vs 6.1 Mt in 2019-20 and 7.4 Mt in 2018-19. Total supply is forecast to rise marginally to 7.3 M vs 7.1 Mt for 2019-20 on higher carry-in stocks, production and imports. Exports are forecast to increase by 17% to 4.2 Mt on support from strong world demand. Domestic processing is forecast up slightly at 1.9 Mt, as crushers return to a normal soybean processing pace.

Carry-out stocks are forecast to decrease by 6% 0.68 Mt versus 0.72 Mt for 2019-20 and the 5 year average of 0.56 Mt. Soybean prices are forecast to increase by 17% to $490/t, on support from the sharp rally in world soybean prices supported in turn by unexpectedly strong Chinese buying.

The USDA maintained its bullish outlook for the 2020-21 crop year in the November release of the WASDE by raising the predicted American farmgate soybean price to US$10.40/bu from US$9.80/bu in October and US$9.25/bu in September, an increase of 6% and 12% respectively. By comparison, the 2019-20 price for soybeans was US$8.57/bu while the 5 year average was US$8.96/bu, 18% and 16% under the current price outlook, respectively.

Support for the strong market rally is provided by a combination of tighter supplies and rising consumption. The prediction for 2020-21 soybean production was scaled back by 2% or 98 million bushels, to 4.17 billion bushels (Bbu) from the October release of the WASDE. Meanwhile, compared to last year, US soybean exports are forecast to rise by 31%, to 2.2 Bbu while domestic use remains comparatively stable, rising by less than 1% or 15 Mbu, to 2.18 Bbu. Ending stocks are expected to tighten strongly, falling by 64% to 190 Mbu from 523 Mbu for 2019-20 while the stock-to-use ratio drops to 4% vs 13% for 2019-20.

At the world level, the USDA scaled back its 2020-21 production forecast for oilseeds by 8 Mt, equivalent to 1% from the October release of Oilseeds: World Markets and Trade. The decline is due to lower soybean production in the United States, Argentina and India along with reduced sunflower seed output in Ukraine and Russia. Most of the losses were due to dry weather across assorted growing regions and fresh harvest data from the United States and India. In Argentina, economic considerations are expected to constrain any potential expansion in area. World crush is projected to decline on tighter supplies while world trade is expected to set a new record. World oilseed ending stocks are reduced by 3 Mt, or 3%, from October to 99 Mt, vs 110 Mt for 2019-20 and the recent high of 132 Mt set in 2018-19, primarily on lower US soybean carry-out.

Pulses and special crops

Dry peas

For 2020-21, production is estimated to rise by 3% to 4.4 million tonnes (Mt). This is largely due to higher yields, especially in Alberta where 45% of the peas are grown. Yellow pea production is forecast to be similar to last year at 3.5 Mt, while green pea production is expected to rise to over 0.7 Mt. Production of the other remaining dry pea types is expected lower at 130 thousand tonnes (Kt). Supply is forecast to be similar to last year at 4.7 Mt despite lower carry-in stocks. Exports are forecast to increase to 3.8 Mt. From August to September 2020, China, US and Bangladesh were Canada’s top three markets. Despite the similar supply, carry-out stocks are forecast to fall. The average price is expected to rise by 11% from 2019-20 to $295/t.

During October, the on-farm price of yellow peas in Saskatchewan rose $45/t while the price of green pea types rose $30/t. Current indications of crop quality suggest there will be an increase in the supply of No.1 and No.2 grade Canadian dry peas when compared to last year. For the crop year to-date, the premium for green dry peas has been $35/t above the price for yellow dry peas, versus $115/t last year.

Area seeded to dry peas in the US for 2020-21 is forecast by the USDA to fall by 9% from last year to 1.0 million acres. This is largely due to lower seeded area in North Dakota. Yields are expected to be above average and US dry pea production is forecast by the USDA to fall by 17% to just over 0.8 Mt. The main export markets for US dry peas are Canada, the Philippines and India.

Lentils

For 2020-21, production is estimated to rise by 29% to 3.1 Mt, due to higher yields and area. Production of red lentils rose sharply from last year to 2.1 Mt, while large green lentil production fell to 0.7 Mt. Production of the other remaining lentil types is expected to decrease to below 0.3 Mt.

Imports, largely from the US, are forecast at 50 Kt. However, supply is expected to be unchanged due to lower carry-in stocks. Exports are expected to be slightly higher than the previous year at 2.9 Mt. To-date, India, the United Arab Emirates and Turkey are the top export markets. Domestic use is expected to fall by 13% due to the higher crop quality. Carry-out stocks are forecast to fall by 4% to 200 Kt and remain tight. The overall average price is forecast to rise by 29% from 2019-20, with an above average grade distribution.

During the month of October, the on-farm price in Saskatchewan for large green lentils rose by $60/t while red lentil prices rose by $15/t. This was largely due to higher export demand. Compared to last year, an increase in the supply of No.1 or No. 2 grade Canadian lentils is expected for 2020-21. To-date, large green lentil prices have maintained a premium of $120/t over red lentil prices, compared to a $105/t premium in 2019-20.

For 2020-21, US area seeded to lentils is forecast by the USDA at over 0.5 million acres, up 7% from 2019-20, largely due to higher area seeded in Montana. With above normal yields and lower abandonment, 2020-21 US lentil production is therefore forecast by the USDA at 0.3 Mt, up 21% from the production in 2019-20. The main US export markets for lentils to-date are the EU, Canada, India and Mexico.

Dry beans

For 2020-21, production is estimated to have increased by 15% to 365 Kt. This includes 95 Kt of white pea bean types and 270 Kt of colored bean types. Production in Ontario decreased due to lower yields and increased in Manitoba due to higher yields. In Alberta, colored dry bean production increased due to higher yields. Supply is forecast to rise by only 7%, due to lower carry-in stocks.

Exports are forecast to be marginally lower than last year. Based on data for August and September, the EU and the US are the top two markets, with smaller volumes exported to Angola and Mexico. Carry-out stocks are expected to increase due to the higher level of supply and lower demand. The average Canadian dry bean price is forecast to fall by 15% due to higher North American supply.

Area seeded to dry beans in the US is estimated by the USDA to increase by 35% to 1.7 million acres, mostly due to larger area seeded in North Dakota. US total dry bean production (excluding chickpeas) is forecast by the USDA at 1.6 Mt, up 68% from 2019-20. The largest increases are expected for white pea beans and pinto beans. The main US export markets continue to be the EU and Mexico.

Chickpeas

For 2020-21, production is estimated at 239 Kt, a 5% decrease from last year due to lower area seeded but higher yields. The production of kabuli types is estimated to be lower than the previous year, while desi type production is expected to be higher. Despite this, the total supply is forecast to increase by 23%, due to large carry-in stocks. Exports are forecast at 105 Kt with the US and Pakistan as the top markets. Carry-out stocks are expected to rise, largely due to increased supply and continue to be burdensome. The average price is forecast to rise by 14% due to above average Canadian crop quality, despite expectations for increased world production.

The USDA has estimated US chickpea area seeded at a 0.25 million acres, 44% lower than in 2019-20. With higher yields and lower abandonment, 2020-21 US chickpea production is forecast by the USDA at 0.17 Mt, down 38% from 2019-20.

Mustard seed

For 2020-21, production is estimated to have fallen 24% to 103 Kt due to lower area seeded. Production of yellow types of mustard increased while brown and oriental production is expected to decrease. However, total supply is forecast to fall by only 20% to 171 Kt. Exports are expected to be similar to last year at 115 Kt and, as of August and September, the US and the EU are the top two markets. Carry-out stocks are forecast to fall sharply and, as a result, the average price is forecast to be 16% higher than in 2019-20.

Canary seed

For 2020-21, production is estimated to be cut by 9% to 159 Kt due to lower area and yields. Exports are expected to be lower than the previous year. Based on data for August and September, Mexico and the EU are the top two export markets, followed by Brazil. Carry-out stocks are expected to tighten. The average price is forecast to be marginally higher than last year at $640/t.

Sunflower seed

For 2020-21, production is estimated to have risen to 95 Kt as higher harvested area combines with increased yields. When compared to 2019-20, supply is expected to increase to 225 Kt due to higher carry-in stocks and production. Exports are forecast to be similar to the previous year, and carry-out stocks are forecast to rise. The US is expected to remain Canada’s main export market for sunflower seed. The price is forecast to be 8% lower on average from last year, due to weaker oilseed type prices than in 2019-20.

US sunflower seed production for 2020-21 is forecast by the USDA at nearly 1.3 Mt, up 44% from 2019-20. This is largely due to higher production in North Dakota. Production of oil type varieties is estimated to have risen to 1.1 Mt and the production of confectionery type varieties is estimated to have increased to over 0.15 Mt. Total supply in the US is expected to rise by 23% at 1.5 Mt. Domestic use and exports are expected to rise. Despite this, US sunflower seed carry-out stocks are expected to rise and pressure North American prices.

The world supply of sunflower seed for 2020-21 is estimated by the USDA at 54.3 Mt. This is 10% lower than last year, due to decreased production in Ukraine and Russia. World domestic use is expected to fall to 50.3 Mt and world exports are forecast to fall to 2.6 Mt. World carry-out stocks are expected to decrease sharply to 1.3 Mt, below the five-year average.

Historical data

Historical principal field crops data are available in spreadsheet format and can be obtained by emailing aafc.bulletin.aac@canada.ca. Please specify crops, crop years, and preferred file format in your request.