Highlights

Wheat production in 2016/2017 was up 15 percent from 2015/2016 at 31.7 MMT as stronger yields made up for a 7 percent drop in harvested area. Post expects fewer exports of wheat for 2016/2017 as quality in the major wheat producing provinces of Western Canada was hurt by frost, snow and excess rain delaying the fall harvest. Post expects to see a 5 percent drop in exports due to both smaller carry-in stocks from 2015/2016 and quality issues as a result of the difficult 2016/2017 harvest. However, Post is also forecasting fewer imports of wheat in 2016/2017 due to higher production coupled with fewer export volumes.

Grain and Feed Update – January

General Information:

Overall production of most grain in Canada is up in 2016/2017 despite delays in harvest for some parts of the Prairies due to rain, frost and snow, which negatively impacted quality. Grain prices for 2016/2017 are expected to trend lower than in the previous year. Total production of Canadian wheat, barley, corn and oats is expected to reach 56.8 MMT in 2016/2017, up 7.6 percent from 52.8 MMT in 2015/2016.

Wheat Production, Supply and Demand Statistics

Wheat

2014/2015

2015/2016

2016/2017

Market Begin

Canada

Aug 2014

Aug 2015

Aug 2016

USDA

New

USDA

New

USDA

New

Official

Post

Official

Post

Official

Post

Area Harvested

9,48

9,48

9,577

9,577

8,878

8,878

Beginning Stocks

10,405

10,405

7,054

7,054

5,171

5,171

Production

29,42

29,42

27,594

27,594

31,7

31,7

MY Imports

486

486

491

491

485

485

TY Imports

490

490

492

492

485

485

TY Imp. from U.S

348

348

340

340

0

0

Total Supply

40,311

40,311

35,139

35,139

37,356

37,356

MY Exports

24,164

24,164

22,134

22,134

21

21

TY Exports

24,877

24,877

22,141

22,141

21

21

Feed and Residual

3,763

3,763

2,634

2,634

5

5

FSI Consumption

5,33

5,33

5,2

5,2

5,2

5,2

Total Consumption

9,093

9,093

7,834

7,834

10,2

10,2

Ending Stocks

7,054

7,054

5,171

5,171

6,156

6,156

Total Distribution

40,311

40,311

35,139

35,139

37,356

37,356


Wheat production in 2016/2017 was up 15 percent from 2015/2016 at 31.7 MMT as stronger yields made up for a 7 percent drop in harvested area. Post expects fewer exports of wheat for 2016/2017 as quality in the major wheat producing provinces of Western Canada was hurt by frost, snow and excess rain delaying the fall harvest. Post expects to see a 5 percent drop in exports due to both smaller carry-in stocks from 2015/2016 and quality issues as a result of the difficult 2016/2017 harvest. However, Post is also forecasting fewer imports of wheat in 2016/2017 due to higher production coupled with fewer export volumes.

Barley Production, Supply and Demand Statistics

Barley

2014/2015

2015/2016

2016/2017

Market Begin

Canada

Aug 2014

May 2015

Aug 2016

USDA

Official

New

Post

USDA

Official

New

Post

USDA

Official

New

Post

Area Harvested

2,136

2,136

2,354

2,354

2,22

2,223

Beginning Stocks

1,95

1,95

1,217

1,217

1,443

1,443

Production

7,119

7,119

8,226

8,226

8,8

8,784

MY Imports

136

136

161

161

75

75

TY Imports

165

165

131

131

75

75

TY Imp. from U.S

77

77

31

31

0

0

Total Supply

9,205

9,205

9,604

9,604

10,318

10,302

MY Exports

1,517

1,517

1,193

1,193

1,7

1,5

TY Exports

1,386

1,386

1,146

1,146

1,7

1,6

Feed and Residual

5,271

5,271

5,768

5,768

5,965

5,8

FSI Consumption

1,2

1,2

1,2

1,2

1,2

1

Total Consumption

6,471

6,471

6,968

6,968

7,165

6,8

Ending Stocks

1,217

1,217

1,443

1,443

1,453

2,002

Total Distribution

9,205

9,205

9,604

9,604

10,318

10,302


Post is forecasting barley production to increase 7 percent to 8.78 MMT due to higher yields even though area harvested in 2016/2017 is expected to be down 6 percent from the last year. Agriculture and Agri-Food Canada reported that the average Canadian barley yield in 2016/2017 was 3.95 t/ha, surpassing the previous record of 3.86 t/ha in 2013. As a result of increased domestic production, Post does not expect to see high import volumes of barley in 2016/2017. Post forecasts total year exports of Canadian barley in 2016/2017 will be up 40 percent with from 2015/2016.

Corn Production, Supply and Demand Statistics:

Corn

2014/2015

2015/2016

2016/2017

Market Begin

Canada

Sep 2014

Sep 2015

Sep 2016

USDA

Official

New

Post

USDA

Official

New

Post

USDA

Official

New

Post

Area Harvested

1,227

1,227

1,312

1,312

1,325

1,325

Beginning Stocks

1,6

1,6

1,402

1,402

2,243

2,243

Production

11,487

11,487

13,559

13,559

13,2

13,193

MY Imports

1,558

1,558

1,374

1,374

1

1

TY Imports

1,536

1,536

949

949

1

1

TY Imp. from US

1,474

1,474

942

942

0

0

Total Supply

14,645

14,645

16,335

16,335

16,443

16,436

MY Exports

423

423

1,738

1,738

800

1,35

TY Exports

395

395

1,764

1,764

700

1,35

Feed and Residual

7,426

7,426

7,073

7,073

7,8

7,47

FSI Consumption

5,394

5,394

5,281

5,281

5,5

5,416

Total Consumption

12,82

12,82

12,354

12,354

13,3

12,886

Ending Stocks

1,402

1,402

2,243

2,243

2,343

2,2

Total

14,645

14,645

16,335

16,335

16,443

16,436


Post is forecasting corn production slightly lower in 2016/2017 at 13.2 MMT, down less than 3 percent from 13.6 MT a year earlier. Post foresees feed, residual, food, seed and industrial consumption will be 4 percent higher than in 2016/2017 due to higher estimated beginning stocks than those seen in 2015/2016. Therefore, Post also foresees 24 percent fewer imports of corn needed in 2016/2017 than the year before as a result of higher carry-in at the beginning of 2016/2017. Despite large stores of corn, Post forecasts a 22 percent drop in exports from 2015/2016 due to global price competition in 2016/2017.

Oats Production, Supply and Demand Statistics:

Oats

2014/2015

2015/2016

2016/2017

Market Begin

Canada

Aug 2014

Aug 2015

Aug 2016

USDA

Official

New

Post

USDA

Official

New

Post

USDA

Official

New

Post

Area Harvested

928

928

1,055

1,055

895

895

Beginning Stocks

1,054

1,054

673

673

928

928

Production

2,979

2,979

3,428

3,428

3

3,147

MY Imports

13

13

10

10

15

12

TY Imports

12

12

10

10

15

12

TY Imp. from U.S.

14

14

10

10

0

0

Total Supply

4,046

4,046

4,111

4,111

3,943

4,087

MY Exports

1,692

1,692

1,567

1,567

1,5

1,713

TY Exports

1,729

1,729

1,666

1,666

1,5

1,713

Feed and Residual

901

901

816

816

850

754

FSI Consumption

780

780

800

800

800

970

Total Consumption

1,681

1,681

1,616

1,616

1,65

1,724

Ending Stocks

673

673

928

928

793

650

Total Distribution

4,046

4,046

4,111

4,111

3,943

4,087


Post is forecasting oat production in 2016/2017 at 3.1 MMT, down 8 percent from the previous year due to a 15 percent drop in both seeded and harvested area. Agriculture and Agri-Food Canada is reporting record oat yields in 2016/2017 at 3.2 t/ha in the Prairies provinces of Alberta, Manitoba and Saskatchewan. Post notes that the slower harvest on the Prairies in fall 2016 due to cold and wet weather has pushed up the oats basis over concerns about the quality of the crop. Post expects higher market prices for oats in 2016/2017 to translate into a 9 percent rise in exports to 1.7 MMT from 1.57 MMT in 2015/2016. Post is also optimistic that domestic milling of oats will remain on trend, increasing 21 percent in 2016/2017 from the previous year.

POLICY

Modernization of Canada's Grain Industry Act Introduced into the House of Commons in late 2014, Bill C-48, the Modernization of Canada's Grain Industry Act, did not make it beyond its first reading before it was stalled and ultimately swept away in the shuffle of the fall 2015 general elections. However, the review of the Fair Rail for Grain Farmers Act that took place in fall 2016 may generate a renewed interest in modernizing the Grain Act. Most notably, there have been calls to level the playing field for U.S farmers delivering grain to Canadian elevators by allowing for official grading, handling, and export of U.S. grain through Canada. Current legislation does not allow for foreign grain, even if it is of a variety that is registered to be grown in Canada, to be issued a grade by the Canadian Grain Commission. Under current legislation, U.S. wheat delivered to a Canadian grain elevator is sold as either feed grade (lowest grade) or according to a specification at any price agreed to by the buyers and sellers.

Changes to Mildew Standards for Western Canadian Milling Wheat

The Canadian Grain Commission (CGC) announced on October 7th that it would be adjusting mildew guidelines in Western Canadian wheat to allow for increased presence of mildew. A two-year study of the impact of mildew on the quality of wheat found that mildew primarily affects the appearance of wheat, and that in the case of semolina, the effect of mildew is negligible.

Proposed Phase-out of Imidacloprid Neonicotinoid Pesticide

On November 23rd, 2016 the Pest Management Regulatory Agency (PMRA) of Health Canada announced a proposed phase-out of the neonicotinoid seed treatment pesticide, imidacloprid, commonly used on corn and soybeans. The phase-out was proposed after an evaluation determined that under current conditions of use, the environmental risks for most products containing imidacloprid do not meet current safety standards.

The environmental assessment showed that, in aquatic environments in Canada, imidacloprid is being measured at levels that are harmful to aquatic insects. Based on currently available information, the continued high volume use of imidacloprid in agricultural areas is not sustainable. The environmental assessment also found that there is a potential risk to birds and small mammals from feeding on seeds that are treated with imidacloprid, however, it is expected that good agricultural practices and equipment could reduce this type of exposure. The health assessment did not identify human health concerns from any exposure route when used according to current label standards. PMRA is proposing to phase-out all the agricultural and a majority of other outdoor uses of imidacloprid over three to five years. PMRA will consider alternate risk management proposals, provided that they can achieve acceptable levels in the environment in the same timeframe.

The proposed re-evaluation decision is now open for public consultation. PMRA is inviting the public to submit comments on the proposed re-evaluation decision for imidacloprid including proposals that may refine the risk assessment and risk management. Before making a final re-evaluation decision on imidacloprid, the PMRA will accept and consider written comments on this proposal received up to February 23rd, 2017. Please forward all comments to PMRA Publications. The PMRA will consider any additional information submitted during the consultation period in the final decision. Please consult the following link for more information on the Proposed Re-evaluation Decision PRVD2016-20, Imidacloprid, or to obtain a copy of the full re-evaluation document.

Environment Minister Announces National Clean Fuel Standard

Environment and Climate Change Minister Catherine McKenna announced on November 25th, 2016 that consultations will be held in February to develop a new clean fuel standard to reduce annual greenhouse gas emissions by 30 Mt by 2030.

Environment and Climate Change Canada will release a discussion paper to help guide consultations on the new clean fuel standard with provinces and territories, indigenous peoples, industry and non-governmental organizations. These consultations would inform the development of a regulatory approach under the Canadian Environmental Protection Act (CEPA).

The objective of a clean fuel standard would be to achieve annual reductions of 30 megatons (Mt) of GHG emissions by 2030. This reduction will provide a significant contribution towards achieving Canada's commitment of 30 percent emissions reduction below 2005 levels, by 2030.

The new standards will apply to fuels used in transportation, homes, buildings, and industrial uses and will set limits on the carbon intensity of fuels, which measures how much carbon is emitted relative to the amount of energy in the fuel being used. While Canada already has renewable fuel regulations that mandate gasoline must include 5 percent renewable content, the clean fuel standard won't require the use of specific fuels or technologies.

New Chief Commissioner of Canadian Grain Commission Announced Canadian Agriculture Minister Lawrence MacAulay announced on January 2nd, 2017 that Patricia Miller will lead the Canadian Grain Commission as its chief commissioner beginning February 13th, 2017. Patricia Miller served as president of the Canola Council of Canada since 2012. As the chief commissioner, Miller will help set the CGC's direction, establish policy, and administer and enforce the Canada Grain Act.