WINNIPEG, Manitoba/OTTAWA - Canada produced more wheat and canola than expected, as dry weather gave way to crucial rains later in summer, Statistics Canada said on Friday in its final 2015 crop report.
After the report, traders drove down ICE Canada January canola futures 1 percent. The market had expected Statistics Canada to raise its estimate, but the government agency's figure easily topped even the highest trade guess in an earlier poll.
Statscan, using a farmer survey, estimated canola production at 17.2 million tons, sharply higher than Statscan's previous estimate for 14.3 million and the average trade guess of 15.6 million tons.
The harvest was 5 percent larger than last year's output and the second-biggest ever.
"The canola number is a shock," said Lawrence Klusa, senior market coach with AgriTrend, adding that it also points to larger supplies at July 31, the end of the crop marketing year.
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The average canola yield jumped 8 percent year over year to 38 bushels per acre, the second highest on record, despite dry conditions in Saskatchewan and Alberta that by late July had produced noticeably shorter than usual plants.
Canada is one of the world's largest wheat exporters and the biggest shipper of canola, a cousin of rapeseed used largely to produce vegetable oil.
Statscan pegged the all-wheat crop at 27.6 million tons, exceeding its October estimate of 26.1 million tons and the average trade expectation of 26.7 million tons. Production dipped 6 percent from last year.
The average total wheat yield, which factors in spring, winter and durum wheat, dipped 7 percent to 42.8 bushels per acre.
Minneapolis March spring wheat futures shrugged off the report, and rose 0.7 percent in early trading.
Statscan's estimates initially look bearish for canola and wheat, but steady demand for both crops and smaller leftover supplies from the previous harvest partly offset the extra output, said Bruce Burnett, weather and crop specialist at grain handler G3 Canada Limited.
Barley, oats and durum crops were all bigger year over year. The barley harvest climbed 15.5 percent to 8.2 million tons, exceeding the 7.6 million expected.
Oat production was up 15 percent to 3.4 million tons, in line with expectations. The durum harvest of 5.4 million tons was up 4 percent year over year and surpassed the average trade estimate of 5.1 million tons.
