Wet weather cuts Canada wheat estimate, may cut more

Thu Jun 23, 2011 10:33am EDT
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By Rod Nickel

WINNIPEG, Manitoba (Reuters) - Canada's farmers planted less wheat this spring than planned due to wet weather, Statistics Canada reported on Thursday, but analysts say plantings are likely even smaller than the report indicates because flooding worsened after the agency's farmer survey.

Statscan reported that canola plantings rose from the earlier estimate to a record high, but the trade doubts the crop forecasts are realistic.

The government statistics agency itself noted that flooding caused delays and uncertainty around planting and its estimates may change in its next report August 24.

Traders and analysts have said for days that they expected the report to inflate plantings since excessively wet conditions in June kept many farmers from seeding their fields as intended.

"We just can't use these numbers for anything realistic," said Ken Ball, commodity futures and options broker at Union Securities in Winnipeg. "Reality is not going to go away."

Farmers planted 23.6 million acres of all-wheat up 11.9 percent from last year, but lower than Statscan's April estimate of 24.7 million acres.

Canola area is estimated to increase nearly 18 percent from last year to a record 19.8 million acres, surpassing the previous forecast for 19.2 million acres.

ICE Canada canola futures dove nearly 3 percent after the report's release, but weaker outside markets played a bigger role than Statscan's large planting estimate, traders said.   Continued...

<p>A field of corn is seen in Embrun, Ontario, October 16, 2010. REUTERS/Shaun Best</p>