Source: Agriculture and Agrifood Canada

SUMMARY

For 2005-06, Canadian exports of grains and oilseeds (G&O) are forecast by AAFC to increase by 18% from 2004-05, to 27.9 million tonnes (Mt). However, G&O carry-out stocks are forecast to increase by 10% to a record 18.0 Mt, largely due to burdensome stocks of durum and canola. Prices are expected to decline from 2004-05 for wheat and oilseeds, increase for oats, and be similar for barley and corn.

For 2006-07, Canadian farmers are expected to increase the areas seeded to non-durum wheat, oats, barley and corn, while reducing areas of durum, canola, flaxseed and soybeans. Trend yields are assumed for both western and eastern Canada, as soil moisture reserves are generally good. Total G&O production is forecast by AAFC to decline by 3% due to lower trend yields, but total supply is projected to increase slightly due to the larger carry-in stocks. Exports are forecast to increase by 2% to 28.5 Mt, with carry-out stocks projected to fall by 11% to 16.1 Mt. The price changes for wheat and durum, compared to 2005-06, are mixed, depending on the grade and protein content. Prices for oilseeds and oats are forecast to decline, while prices for barley and corn are expected to strengthen. Prices will continue to be pressured by the strong Canadian dollar. The market outlook is very tentative due to the high degree of uncertainty regarding global supply and demand conditions. In addition, trade policy factors, such as the anti-dumping and countervail (AD/CV) duties currently in place on imports of unprocessed grain corn from the US, also affect the outlook. The other major factors to watch are: US winter wheat conditions, winterkill in Russia and Ukraine, import demand from China, EU export subsidies and the Canada/US exchange rate.

Full report in PDF format: http://www.seedquest.com/News/releases/2006/pdf/15314.pdf