June 14, 2011 / 9:06 PM / in 6 years

Wet conditions to hit Western Canada wheat crop: CWB

WINNIPEG, Manitoba (Reuters) - Canada’s western crop belt will produce less wheat, but more durum and barley this year, as excessive moisture drowns fields in Manitoba and Saskatchewan, the Canadian Wheat Board said on Tuesday in its first forecast of the year for the region.

Flooding has hit the world’s biggest spring wheat and durum exporter for the second straight year, shrinking spring wheat acres to their second-lowest level since 1971.

Farmers will be unable to plant six million to eight million acres of all crops, the Wheat Board said, down from about 10 million a year ago, but still relatively high.

Quality of crops may also be a problem. Bruce Burnett, the board’s director of weather and market analysis, said he has “serious concerns,” about autumn frost damaging immature crops.

Farmers on the Canadian Prairie will produce 20.3 million metric tones of all-wheat, down 3 percent from last year, along with 3.8 million metric tones of durum (up 27 percent) and 7.7 million metric tones of barley (up 10 percent), the Wheat Board said at its annual crop industry briefing in Winnipeg, after grain markets closed.

(Graphic on historic production: r.reuters.com/myf22s)

Western Canada’s spring wheat production is especially crucial this year, with the northern U.S. Plains flooded, the U.S. winter wheat crop shriveled by drought, and tight global stocks of top-quality milling wheat.

Spring wheat production will fall by 1.2 million metric tones, or 7 percent, to 15.9 million metric tones.

“Many farmers in the wettest areas have planted next to nothing this spring, while others are watching their newly emerged crops drown,” said Burnett.

Farmers have struggled this spring from flooding rivers and too much rain on land that remained saturated over winter from even worse conditions last year.

All-wheat acres will inch up nearly 2 percent to 20.35 million, and include 15.92 million acres of spring wheat (down nearly 2 percent) and 4.01 million acres of durum, up 27 percent.

“The spring wheat production (estimate) could be a surprise to the trade,” said Jerry Klassen, manager of GAP SA Grains and Produits in Winnipeg. “It’s lower than the trade was anticipating.”

Minneapolis nearby spring wheat futures are not far from a nearly three-year high reached earlier this month, and could take support from the Wheat Board’s dismal projections, Klassen said.

The Wheat Board’s unplanted acres estimate includes 4 million acres in Saskatchewan and 2.5 million in Manitoba.

Doug Chorney, president of Keystone Agricultural Producers in Manitoba, said the outlook would be worse if farmers didn’t swarm their fields on the weekend to sow as many final acres as possible.

“When you get two (bad years) back to back, your margins start to decline and producers resort to using up equity. Once that’s gone, there’s usually an auction sale,” he said.

Barley acres will rise to 6.66 million from 6.42 million.

Maltsters and brewers are eager to see a bigger, better-quality barley crop in Western Canada this year to ease tight stocks that are likely to raise beer prices next year.

The Wheat Board projected above-average yields for wheat and barley would make up some of the impact of poor planting conditions, as crops tend to fare better in conditions that are too wet than too dry.

Protein content in Canadian wheat looks to be only slightly below average, as dry crops in northern growing areas make up for low protein in wet areas, Burnett said.

The board’s planting numbers are lower than those Statistics Canada projected in late April, based on a farmer survey conducted before all snow had melted.

Statistics Canada will release its first crop production estimates for the country on June 23.

Reporting by Rod Nickel; editing by Jim Marshall, David Gregorio, and Carole Vaporean

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