July 15, 2016 / 4:36 PM / in a year

Bin-busting Canada wheat, canola crops raise pile-up fears: Reuters poll

WINNIPEG, Manitoba (Reuters) - Canadian farmers are growing some of the biggest crops in recent memory, according to a Reuters survey of 12 analysts and traders, raising fears of another grain pile-up.

Greenhouse-like weather in the west has fueled expectations for the second-biggest wheat crop in 25 years and second-largest canola harvest ever for the major grain exporter.

“It’s going to be above-average for sure,” said Alberta farmer Chad Bown, who has a new bin on order to store his next harvest.

Traders and analysts on average estimate all-wheat production at 30 million tonnes, up 9 percent from last year, mainly because of greater durum output.

Canola production looks to increase 4.5 percent to 18 million tonnes.

Western Grain Elevator Association, whose members include Richardson International and Cargill Ltd [CARGIL.UL], took the unusual step of urging Canadian National Railway Co and Canadian Pacific Limited in late June to ensure enough capacity to move large crop shipments to ports and North American buyers.

The record-smashing 2013 harvest, followed by severe winter weather, slowed grain movement and crimped farmers’ incomes.

The Agricultural Producers Association of Saskatchewan also warned of potential for repeating 2013’s “logistical nightmare” for farmers unless railways and grain companies prepare now.

“All of us will benefit if the Canadian grain supply chain moves as much as possible over the coming months ... thereby lowering the total volume to move during the peak,” CP Chief Executive Officer Hunter Harrison told federal ministers on June 28.

CN is “fully prepared” to quickly transport crops, spokesman Mark Hallman said.

Big harvests of lentils and of durum, the wheat used in pasta production, would be welcome news for processor AGT Food and Ingredients Inc, while robust production of canola, used to make vegetable oil, would stock Canada’s expanding crushing industry, including Bunge Ltd and Archer Daniels Midland Co.

“Wheat supplies are almost overwhelming (globally),” said PI Financial Corp futures adviser Ken Ball. “It’s a real buyers’ market.”

Another big canola crop would be offset somewhat by smaller leftover supplies from last year, he said.

Statistics Canada satellite images as of Sunday showed that vegetation growth across most of the Canadian Prairies ranged from similar to much higher than normal.

Recent storms have trimmed crop potential, although forecaster Lanworth said on Thursday that heavy rains would shift north of Canada’s wheat and canola areas through late July.

Statscan will issue production estimates on Aug. 23.

Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Lisa Von Ahn

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