WINNIPEG, Manitoba (Reuters) - Canadian farmers will take advantage of dry planting conditions this spring to sow a record-large canola area, and boost acreage of wheat and other crops, according to a Reuters trade survey.
After spring floods the past two years washed out millions of acres in Manitoba and Saskatchewan, farmers have started planting early this year.
In Statistics Canada’s first report of the year on planting plans Tuesday, the government agency will forecast 20.6 million acres of canola, according to a Reuters survey of 16 grain traders and analysts.
That would smash last year’s record high of 18.9 million acres by 9 percent and exceed by more than 1 million acres the average estimate in a previous Reuters poll only two months ago.
Most major crops stand to gain acres in favorable planting conditions, but new-crop canola futures prices soared this month to contract highs on demand from crushers and exporters for the oilseed used to make vegetable oil.
“Farmer comments seem to be coming from all parts of the Prairies that an extra quarter or half section (of land for) canola will be planted based on profitability,” said Ron Frost, an Alberta-based agriculture analyst. “Some comments from northern areas even suggest good crop rotation practices will be ignored to capitalize on this potential windfall year.”
The only question in analysts’ minds is just how bullish farmers are. The lowest estimate of 19.85 million acres still amounts to 1 million acres more canola than last year, while the most optimistic guess is a whopping 21.6 million acres.
Farmers are also poised to grow more wheat, durum and barley in the first crop year since World War 2 without monopoly control by the Canadian Wheat Board.
All wheat area looks to span 23.4 million acres, traders said on average, up 9 percent from last year’s production. Durum area will rise 12 percent to 4.5 million acres, according to the survey.
“In those (previously flooded) areas, fairly modest amounts are going back into cereals,” said Chuck Penner, analyst at LeftField Commodity Research. “I think it is just a rotational issue - they can’t just put all of those acres into canola.”
The fact farmers can already sell 2012/13 wheat and barley to any buyer through forward contracts, instead of just to the Wheat Board as in the past, looks to make little difference to overall seeding plans, Penner said.
The weather may still be a factor, however.
If soil conditions remain dry, farmers might be tempted to slightly bump up spring wheat and durum acres at the expense of canola, which is planted shallow in the soil, a grain trader said.
Farmers may plant 19 percent more barley for an area of 7.7 million acres, while the oat area could rise 9 percent to 3.4 million acres, according to the average trade estimate.
Statscan may project such a huge increase in barley plantings, but prices of the grain used in livestock feeding and brewing have recently lost ground to other crops, and farmers may still taper back their plans, a grain trader said.
Planting is underway in southern parts of the Prairies earlier than usual, but rain has stalled field work while adding moisture that is critical to helping plants germinate.
Statistics Canada surveyed 13,432 farmers across the country between March 23 and 30.
Reporting by Rod Nickel in Winnipeg; editing by Sofina Mirza-Reid