Highlights

Total production of Canadian wheat, barley, corn and oats is forecast to increase to 54.4 MMT in 2016/17, up 3 percent from marketing year 2015/16. The expected rise in production is attributed to stronger wheat and barley yields despite lower acreage in both of these crops. Quality issues with oats and wheat may pose a challenge for what remains to be harvested due to excess moisture. Expect to see corn production down in 2016/17 from last year with a return to average export levels as the Canadian Dollar strengthens. Snow and heavy rain has made for a staggered harvest in Saskatchewan and parts of Alberta. A more spread out harvest should help avoid any bottlenecks with shipping as industry consultations on Canada's Fair Rail for Grain Farmers Act continue through the fall.

WHEAT

Wheat

2014/2015

2015/2016

2016/2017

Market Begin

Year

Aug 2014

Aug 2015

Aug 2016

Canada

USDA

New

USDA

New

USDA

New

Official

Post

Official

Post

Official

Post

Area Harvested

9,480

9,480

9,577

9,577

9,260

9,260

Beginning Stocks

10,405

10,405

7,054

7,054

5,167

5,167

Production

29,420

29,420

27,594

27,594

31,500

29,177

MY Imports

490

490

485

485

485

485

TY Imports

490

490

492

492

485

485

TY Imp. From US

348

348

340

340

0

0

Total Supply

40,315

40,315

35,133

35,133

37,152

34,829

MY Exports

24,164

24,164

22,134

22,134

22,000

21,000

TY Exports

24,877

24,877

22,141

22,141

21,500

21,500

Feed and Residual

3,767

3,767

2,632

2,632

4,000

4,300

FSI Consumption

5,330

5,330

5,200

5,200

5,200

5,200

Total Consumption

9,097

9,097

7,832

7,832

9,200

9,500

Ending Stocks

7,054

7,054

5,167

5,167

5,952

4,329

Total Distribution

40,315

40,315

35,133

35,133

37,152

34,829

Despite strong yields throughout most of the country, a damp and snowy harvest in parts of Alberta and Saskatchewan is making for quality downgrades, which could see more wheat heading to feedlots than foreign destinations.

All wheat production for 2016/17 is estimated at 29.2 million metric tons (MMT), a 6 percent increase from year 2015/2016. This represents the highest level of production since the 2013/14 crop year. Improved yields are expected to bolster production in 2016/17 even with fewer planted acres.

As of October 18th, 2016, average protein levels for all grades of spring wheat for the 2015/16 crop are being reported at 13.7 percent, while the durum average being reported is 12.9 percent, down 0.4 and 1 percentage points from last year, respectively

Post maintains market year export levels below USDA official numbers due to recent snow, frost and rain events in Alberta and Saskatchewan that has halted the fall harvest. Moisture and frost damage are expected to cause quality downgrading in wheat destined for exports, relegating it to feed use.

Therefore, Post has revised feed use up from USDA's estimates to reach 4.3 MMT representing an 11 percent increase from the previous year.

BARLEY

Barley

Aug 2014

May 2015

Aug 2016

Canada

USDA

New

USDA

New

USDA

New

Official

Post

Official

Post

Official

Post

Area Harvested

2,136

2,136

2,35

2,35

2,3

2,325

Beginning Stocks1, 95

1, 95

1,217

1,217

1,443

1,443

Production

7,119

7,119

8,225

8,225

8,5

8,5

MY Imports

136

136

150

150

75

75

TY Imports

165

165

125

125

75

75

TY Imp. from US

76

76

0

0

0

0

Total Supply

9,205

9,205

9,592

9,592

10,018

10,018

MY Exports

1,517

1,516

1,193

1,193

1,5

1,5

TY Exports

1,384

1,384

1,15

1,15

1,6

1,6

Feed andResidaul

5,271

5,222

5,756

5,756

5,765

5,765

FSI Consumption1, 2

2, 25

1,2

1,2

1,2

1,2

Total Consumption

6,471

6,472

6,956

6,956

6,965

6,965

Ending Stocks

1,217

1,217

1,443

1,443

1,553

1,553

Total Distribution

9,205

9,205

9,592

9,592

10,018

10,018

Post is forecasting higher exports of barley due to lower world supply and a strong demand for malt barley. Protein content for the 2015/16 crop is averaging at 11.3 percent toward the lower end of the ideal range for high quality malting.Barley production in 2016/2017 is estimated at 8.5 MMT, up 3 percent from last year. Production forecasts are up due to near-record yields in 2016/17 despite seeded and harvested areas being down from 2015/16. Post is projecting more optimistic harvested acreage than USDA's official number to more closely reflect the historical proportion of area harvested to area seeded of 90 percent.

Given softer world feed barley prices, Canadian cattle and hog production are expected to rise in 2016/17, leading Post to forecast higher barley feed use than USDA's estimate.

Corn

Corn

2014/2015

2015/2016

2016/2017

Market Begin

Sep 2014

Sep 2015

Sep 2016

Canada

USDA

New

USDA

New

USDA

New

Official

Post

Official

Post

Official

Post

Area Harvested

1,227

1,227

1,31

1,31

1,32

1,32

Beginning Stocks

1,6

1,6

1,402

1,402

1,49

1,49

Production

11,487

11,487

13,6

13,6

12,5

12,8

MY Imports

1,558

1,558

1,326

1,326

1,5

1,3

TY Imports

1,533

1,533

1,3

1,3

1,5

1

TY Imp. from

1,472

1,472

0

0

0

0

Total Supply

14,645

14,645

16,328

16,328

15,49

15,59

MY Exports

423

423

1,738

1,738

700

800

TY Exports

395

395

1,75

1,75

600

800

Feed and Residual

7,426

7,426

7,7

7,7

7,8

7,8

FSI Consumption

5,394

5,394

5,4

5,4

5,5

5,5

Total Consumption

12,82

12,82

13,1

13,1

13,3

13,3

Ending Stocks

1,402

1,402

1,49

1,49

1,49

1,49

Total Distribution

14, 645

14, 645

16, 328

16, 328

15, 490

15, 590


Corn production in 2016/2017 is expected to reach 12.8 MMT, which represents a 6 percent decrease over estimated 2015/2016 production. Post's forecasted production is lower than USDA's, which is expected to translate into lower import numbers.

Post is expecting a modest drop of 6 percent in corn yields closer to Statistics Canada's forecasted 3 percent decrease from 2015/16.

OATS

Oat

Aug 2014

Aug 2015

Aug 2016

Canada

USDA

New

USDA

New

USDA

New

Official

Post

Official

Post

Official

Post

Area Harvested

928

928

1,05

1,05

930

930

Beginning Stocks

1,054

1,054

673

673

930

930

Production

2,979

2,979

3,43

3,43

3

3

MY Imports

13

13

10

10

15

15

TY Imports

12

12

10

10

15

15

TY Imp. from US

11

11

0

0

0

0

Total Supply

4,046

4,046

4,113

4,113

3,945

3,945

MY Exports

1,692

1,692

1,567

1,567

1,5

1,55

TY Exports

1,729

1,729

1,6

1,6

1,5

1,55

Feed and Residual

901

901

816

816

850

820

FSI Consumption

780

780

800

800

800

810

Total

1,681

1,681

1,616

1,616

1,65

1,63

Ending Stocks

673

673

930

930

795

765

Total Distribution

4,046

4,046

4,113

4,113

3,945

3,945


Production of oats is expected to drop to 3 MMT, down 13 percent from the previous year. The decline is attributed to lower seeded area and yields with excess moisture affecting quality in the western provinces.

There have been reports out of Western Canada that oat quality is mixed due to heavy rain and snow affecting nearly a quarter of Saskatchewan's crop which has yet to be harvested. The portion of production usable for the mill market is yet to be determined, but the concern is that anything still out in the fields will not be of quality suitable for milling.

Post is forecasting strong beginning stocks in 2016/17 providing an export opportunity for Canadian oats. Post expects that lower production and good export opportunities will translate into a lower carry-out for oats in 2016/17.

Production of oats is expected to drop to 3 MMT, down 13 percent from the previous year. The decline is attributed to lower seeded area and yields with excess moisture affecting quality in the western provinces.

There have been reports out of Western Canada that oat quality is mixed due to heavy rain and snow affecting nearly a quarter of Saskatchewan's crop which has yet to be harvested. The portion of production usable for the mill market is yet to be determined, but the concern is that anything still out in the fields will not be of quality suitable for milling.

Post is forecasting strong beginning stocks in 2016/17 providing an export opportunity for Canadian oats. Post expects that lower production and good export opportunities will translate into a lower carry-out for oats in 2016/17.

Proposed Re-Evaluation of Glyphosate

Canada's Pest Management Regulatory Agency (PMRA) routinely conducts re-evaluations of products licensed under the Pest Control Act. The PMRA is proposing continued registration of products containing glyphosate for sale and use in Canada. “An evaluation of available scientific information found that products containing glyphosate do not present unacceptable risks to human health or the environment when used according to the proposed label directions". The re-evaluation will nonetheless propose new risk reduction measures to further protect human health and the environment.

Glyphosate plays an important role in Canadian weed and crop management due to its wide application window ranging from pre-seeding to post-harvest as a desiccant. The final review decision is set for March 2017.

Re-Evaluation of Neonicotinoids

The PMRA is in the process of completing a routine re-evaluation of neonicotinoid pesticides used on corn and soybeans in North America. Preliminary results on imidacloprid were released in January 2016. “No potential risk to bees was indicated for seed treatment use". Initial findings on thiamethoxam and clothianidin are expected later this year

A value assessment was also conducted to comply with provisions under the Pest Control Products Act which require all products licensed under the Act to have an actual or potential contribution to pest management. " The economic benefit analysis determined that the national economic value of neonicotinoid seed treatment to the soybean industry results in an estimated economic benefit of about 1.5% to 2.1% of the national farm gate value for 2013 (about $37.3 to 51million)."