WINNIPEG, Manitoba (Reuters) - Record wheat prices will probably tempt Canadian farmers to boost wheat plantings by more than 12 percent, grain traders and analysts said ahead of a key report from Statistics Canada on Monday.
Traders expected Statscan’s planting intentions report, slated for release Monday at 7:30 a.m. CDT (8:30 a.m. EDT), to also show farmers will grow more oilseeds and peas, but less barley and oats.
All-wheat plantings were forecast, on average, to rise to 24.4 million acres from 21.617 million acres last year, by traders polled by Reuters ahead of the report.
They anticipated total seeded acreage to rise as record prices for all crops give farmers incentive to tear up cattle pastures and leave as little land idled as possible.
“As was the case in the U.S., it is apparent that total acres are going to go up, as growers push to cash in on the big prices,” a broker said, adding his farmer clients continued to make last-minute changes to crop plans, muddying forecasts.
Statscan surveyed 16,000 farmers by phone between March 20 and 31, but farmers are only now beginning to plant crops in the southernmost parts of the Prairie grain belt.
Planting is usually in full swing in early May.
World markets hungry for new wheat supplies will closely watch Statscan’s wheat prediction, analysts said.
Record-low world stocks have fueled demand for wheat. Spot Minneapolis spring wheat futures spiked above $20 per bushel in February, and continue to hover above $12 a bushel, more than double the year-ago level.
Canada is one of the world’s top exporters of high-protein spring wheat, used to make flour, and also accounts for more than half of world trade in durum wheat, used for pasta.
Traders forecast plantings of canola, crushed to make heart-healthy vegetable oil and biodiesel, would hit a new record, thanks to surging prices.
But skyrocketing fertilizer prices may have curbed some interest in canola, and made wheat a more appealing choice.
“This year, more than ever, farmers are going to look to something that’s cheap to grow; low risk, good returns,” a grains trader said.
Record nitrogen prices also favor peas, a crop that requires less fertilizer, and fixes it in the soil, boosting yields of crops grown on the same land the subsequent spring.
New-crop bids for peas are up 50 percent from last spring and are more than twice average levels, a pea trader said.
Concerns about drought could also play a role, favoring durum and lentils in southern areas, cereals over oilseeds, and flax over canola, traders said.
The southern Prairies as well as large portions of Alberta and Manitoba are dry, according to a federal government monitor here .
Farmers may take a pass on oats because of a glut produced last year, traders said.
Barley may also be less attractive than other crops. Returns for malting barley used to make beer are strong, but most barley will be sold to the depressed livestock sector.
Soaring feed costs at a time of weak prices and a strong Canadian dollar have prompted Canadian cattle and hog producers to liquidate herds and send more young livestock to the U.S. Midwest, where it is cheaper to feed them to slaughter weight.
“The livestock situation is the worst we’ve ever seen it in Canada,” a grains trader said.
Editing by John Picinich