Alberta tougher than I thought

[charliep]

Sep09 -Alberta yields improving but below average
WINNIPEG, Manitoba, Sept 2 (Reuters) - Yield estimates have increased by 3-4 bushels per acre for most crops since July 30, but they remain below 80 percent of the five-year average in the province of Alberta.
* Harvest is underway in all regions, mainly on winter cereals and peas.
* 10 percent of crops are swathed, with a further 3 percent harvested.
* Light frost was reported in the past two weeks in west-central regions and the central portion of the Peace region.
* The province needs 2 more weeks of frost-free weather for the crop to mature.
* Spring wheat - 74.8 percent is rated in poor/fair condition, with 25.2 percent in good/excellent shape.
* Durum - 67 percent in poor/fair condition, 33 percent in good/excellent shape.
* Barley - 74.3 percent poor/fair, 25.7 good/excellent.
* Oats - 74 percent poor/fair, 26 percent good/excellent.
* Winter wheat - 85.4 percent poor/fair, 14.6 percent good/excellent.
* Canola - 76.1 percent poor/fair, 23.9 percent good/excellent.
* Peas - 78.9 percent poor/fair, 21.1 percent good/excellent. * Sub-surface moisture has improved slightly to 53 percent poor, 28 percent fair, 17 percent good and 2 percent excellent.

What kind of yields we talking here?

[charliep]

The Alberta crop report referred to here can be found at (yields with comparison statcan are included in the document):

[URL="http://www1.agric.gov.ab.ca/$Department/deptdocs.nsf/all/webdoc12819"]Alberta August 27 Crop Report[/URL]

To put into perspective, Alberta 2009 spring wheat yield is forecast to be 32 bu/acre versus a 5 year average of 45 bu/acre and a range over this time of 40 to 48.

Barley is forecast 43.6 bu/acre with average of about 63 and a range of 55 to 67.

Canola is forecast 26.4 versus an average of 35 and a range of 30 to 38.

Suspect our numbers are a bit on the negative side but will find the October Statcan interesting.

[charliep]

Will comment here versus other places but all should be watching the demand side as much as anything.

Canola - need a 10 plus million tonne crop. Until South American production is more known, US soybeans will be the only game in town and world oilseed demand remains perky in spite of recent declines.

Feedgrains (and malt). Wouldn't underestimate the impact of the North American livestock industry meltdown and issues in ethanol on prices. Europe is like Western Canada last year - so much malt barley they don't know what to do with it.

Wheat - demand side can best be described as a big dog with fleas. Big supplies and a declining market share for the high quality wheat we produce. Whatever happens in western Canada won't have any impact on prices.

[Hopperbin]

Charlie what is the Ethanol feed stock demand looking like in Canada and USA? Not many buying ahead and last purchase was 4.25 here for wheat but well booked up at the moment. I can still remember a few years back when 4.25 was a good price for hard red spring. When I rub out heads looks to me I have some midge damage even though we sprayed here so when the combines start rolling in a few weeks on the wheat hard to say what the sample will look like.

[charliep]

Others that will know better than me but I suspect somewhere around 1 million tonnes in western Canada. The question will be whether they use imported US corn or local wheat.

Two questions on my mind.

How low will US corn prices go? At $3.25/bu CBT corn futures, landed alberta price for US corn is about Cdn $175/tonne. Some thought with a 160bu/acre US corn yield, futures prices could slip 50 cents/bu ($2.75/bu or a landed Alberta price of Cdn $155/tonne). That will limit mid quality wheat prices. Add in that unit trains of corn can be bought with one phone call and perhaps less challenging logistics (yes, unit trains are sometimes late, etc) and the ease of use in an ethanol plant (corn is close to a perfect ethanol plant) and you have incentive to buy corn.

Do we know what the perfect wheat is for ethanol plant? Are we producing it? From what I know, CWRS is a challenging crop to deal at an ethanol both in terms of ethanol yield and enzymes required. Add in challenges of a frost damaged 3 or Canada and what discount is required? Impact on DDG value/markets? How much CPS/CWRS/SWS is available and what if any are the downgrading factors (impact ethanol yield)? Market signals and contracts necessary to make ethanol types of wheat a viable alternative for your crop rotations?

[charliep]

Second last sentence should be CWRW (not CWRS), i.e. CPS/CWRW/SWS.

[furrowtickler]

Snappy, several people on here have stated all summer that Alberta was in bad shape. So is Western Sask. Disapointing pules yeilds in SW Sask so far.