Expanded Crop Potential for Canada

VANCOUVER - Feb 9/08 - SNS -- Production of grains, oilseeds, pulses and special crops in Canada is forecast to increase to from 64 to 70 million metric tons (MT) this year, due to higher area and yields, says Agriculture Canada in its first 2008-09 outlook.

"However, total supply is forecast to increase less dramatically due to lower carry-in stocks. Exports are forecast to increase by 7% and food and industrial use is also expected to increase due to the strong demand for biofuel. Carry-out stocks are forecast to increase slightly. Prices for grains, oilseeds, pulses and special crops are expected to remain historically high but prices in Canada will continue to be pressured lightly by the appreciation of the Canadian dollar," the departments market analysis division in Winnipeg said.

"World wheat and durum prices are expected to decrease from the highs of 2007-2008 due to a major increase in wheat and durum production in the major exporting countries. World coarse grain prices are expected to increase slightly on support from lower corn production in the United States and the continued strength of the biofuel sector. World oilseed prices are expected to decrease on pressure from increased production in the US and South America. The market outlook is very tentative due to uncertainty regarding global supply and demand conditions which, in turn, are largely related to weather or policy changes in any of the major importing or exporting countries."

Looking at acreage prospects for 2008, Agriculture Canada said field pea, mustard seed and lentil area should rise due to high expected net returns. The area seeded chick peas and dry beans is forecast to decrease; while sunflower should to be relatively unchanged. Summerfallow area is expected to decrease according to its historic trend.

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