Statistics Canada Reveals New Forecasting Methodology

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DTN Canada Markets
Friday Sept 18 2015

Cliff Jamieson Canadian Grains Analyst

Statistics Canada revealed its first-ever model-based principal field crop estimates Thursday. Statistics Canada combined its Crop Condition Assessment Program (based on satellite data), along with its regular Field Crop Reporting Series based on producer surveys, as well as agroclimatic data.


Statistics Canada's new methodology for estimating Canadian crop production saw production prospects increase for many of Canada's crops from earlier July estimates.

This year's Sept. 17 report falls between the survey-based July estimates and with the September Farm Survey estimates, which will be released in the production of principal field crops report on Oct. 2. Both rely on conventional Statistics Canada methodology.

I was contacted by a Saskatchewan producer on the same day as this release. He was concerned about the challenges to estimate production. These included: some countries have incentives to overstate production to obtain subsidies; global stockpiles are at risk because of quality deterioration; and domestic producers intentionally feed inaccurate information on surveys. Some people also have a lack of confidence in the government's reports.

While this particular report may be the first of its kind, Statistics Canada has used satellite data to estimate yields in the past. In 2012, satellite data was used to produce yield estimates which were higher than final official Statistics Canada yields. The Crop Condition Assessment Program (CCAP) released yield estimates that were .7% higher than the final official Statistics Canada data for spring wheat, 21.7% higher for canola, .8% higher for durum and 14.4% higher for barley. Across these four crops reported, average yields estimated by the CCAP were 9.4% higher than final official estimates.

In 2013, CCAP estimates were viewed as too low, in fact, The Western Producer reported them to be "way off the mark" according to trade responses. Prairie spring wheat yields reported by CCAP were 17.4% lower than the final official estimate, while 15% lower for canola, 18.4% lower for durum and 12.6% lower for barley. Across the four commodities, average yields estimated by the CCAP were 15.9% lower than the final reported estimate.

2014 data once again saw CCAP estimates come in below the final official estimates based on producer surveys. CCAP's spring wheat yield was 11.4% below the final estimate, the canola yield was 1.7% below the final estimate, the durum yield was 10.5% below the final estimate and the barley estimate was 12.9% below the final official estimate. Across the four commodities, the average CCAP yield estimate was 9.1% below the final official estimates.

The attached chart indicates many Canadian crops improving since the July estimates were released in August, as seen in the move from the red bar to the blue bar. This is widely expected because of more favorable weather seen in late summer. Of the crops shown, only oats and corn are expected to see production increase from last year, while durum, oats and corn crops are expected to reach production levels above their five-year averages.

On Oct. 2, survey-based results will be reported and this week's data release can be compared to data obtained from conventional methods.

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From DTN PRAIRIE MARKET PROBE 9/18/2015

STATSCAN BOOSTS CANOLA EXPORTS
Model-based principal field crop estimates were released by Statistics
Canada on Thursday. The model incorporates coarse resolution satellite data from
Statistics Canadas Crop Condition Assessment Program, data from its Field Crop
Reporting Series and agroclimatic data.
The new model isnt any more or less accurate than StatsCans traditional
estimates; its just a different way of collecting the information, said Cindy
Carter, senior analyst for Statistics Canadas crops unit.
Canada's spring wheat production is estimated to be 18.4 million tonnes in
2015, down 13.0% from 2014. This estimated decrease in production is mainly the
result of a lower estimated average yield. The average yield is anticipated to
be 40.5 bu/acre, down 11.7% from the 45.9 bu/acre reported in 2014. The
harvested acreage for 2015 is reported to have edged down 1.5% compared with
2014.
Spring wheat production is anticipated to decrease in Saskatchewan (-19.8%)
and Alberta (-23.3%). Estimated average yields in Saskatchewan are anticipated
to be down 14.0% compared with 2014 to 34.9 bu/acre. In Alberta, the
estimated average yield is expected to decrease 20.1% from 2014 to 41.4 bushels
per acre.
In contrast, Manitoba spring wheat production is estimated to increase 26.2%
in 2015. This gain was boosted by an estimated higher yield of 52.2 bu/acre, a
7.0% increase over 2014, and a reported 18.0% increase in harvested area.
Average yields for durum wheat at the national level are estimated to decline
24.5% from 2014 to 30.9 bu/acre. Despite much lower estimated yields,
national production is estimated to decline 8.0% from 2014 to 4.8 million tonnes
as a result of a 22.1% increase in reported harvested acreage in 2015.
Canola production at the national level is estimated to be 14.4 million
tonnes in 2015, down 11.6% from 2014. This estimated decrease in production is a
combined result of both lower average yields and anticipated harvested acreage.
Estimated average yields for 2015 are down 7.2% from 2014 to 32.6 bu/acre.
Anticipated harvested acreage will be down 4.9% in 2015, another factor in
the decrease in the production estimate.
Estimated average yield, reported harvested acres and production are all
forecast to decrease in Saskatchewan and Alberta, two major canola-producing
regions. Canola crops have been affected by a late frost in May and by drought
and hot conditions for much of the growing season in the two provinces. On the
other hand, increased production is anticipated in Manitoba as a result of
higher estimated yields combined with a slight increase in reported harvested
area.
Soybean production is estimated to be 5.9 million tonnes in 2015, up 2.1%
from 2014 despite a reported decrease in harvested area in Quebec (-9.0%) and
Ontario (-4.6%). Soybean yields are estimated to increase in all provinces in
2015. Production is anticipated to increase by 22.6% in Manitoba to 1.4 million
tonnes in 2015, the result of both increased yield ( 17.0% to 37.8 bu/acre) and
reported harvested acreage ( 4.8% to 1.3 million acres).
corn for grain production is estimated to increase 12.5% from 2014 to 12.7
million tonnes in 2015. Corn for grain yields are estimated to increase in all
provinces in 2015. Higher yields and reported harvested acreage will lead to
increased production in Ontario ( 13.4% to 8.6 million tonnes) and Quebec
( 13.3% to 3.4 million tonnes). In Manitoba, production is estimated to decline
0.5% to 693 000 tonnes. This will be the result of an 8.2% decrease in
anticipated harvested acres, which will offset an estimated yield increase of
8.4% to 121.2 bu/acre in 2015.
Canada's barley production is estimated to increase 0.5% from 2014
to 7.0 million tonnes in 2015. An 8.1% increase in reported harvested area (5.6
million acres in total) is anticipated to offset a 7.0% decrease in estimated
average yield (57.8 bu/acre).
Canada's oat production is estimated to increase 10.9% from 2014
to 3.2 million tonnes in 2015. The rise in production is forecast to be the
result of an 18.4% increase in reported harvested acres (2.6 million acres in
total), while estimated average yield is anticipated to fall 6.3% to 79.6
bu/acre.

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From AWC Web site:

Daily Market Commentary

North American Grain/Oilseed Review – Canola Feels Harvest Pressure Before Weekend
By Dave Sims, Commodity News Service Canada

Winnipeg, September 18 – The ICE Futures Canada canola market ended weaker Friday, tracking losses in the US soy complex while under growing harvest pressure.

One trader said he thinks many Canadian farmers have decided to start selling and canola could fall by as much as C$20 next week.

“I think the yields are better than everybody thinks they are, the genetics in some of this canola are pretty good,” he added.

The market is still feeling the impact from yesterday’s Statistics Canada report which raised the outlook for Canadian canola production from 13.3 million tonnes to 14.4 MT.

However, wet weather continues to delay combining in parts of the Prairies which was supportive.

Gains in US wheat and subdued selling in US corn helped limit the losses, according to the trader.

A total of 18,963 canola contracts traded on Friday, which compares with Thursday when around 15,442 contracts changed hands.

Milling wheat, barley and durum were all untraded.

Settlement prices are in Canadian dollars per metric ton.

SOYBEAN prices finished 17 cents per bushel lower Friday, pressured by concerns over foreign demand and continued good weather in the Midwest.

Worries persist over how economic troubles in China, the top buyer of American soybeans, will affect the country’s purchasing schedule going forward.

A trader says some regions of Iowa are preparing for record yields this season, brought on by a mix of potent seeds and perfect amounts of summer moisture.

“People haven’t seen crops like this, it will offset bad stuff in Illinois and Indiana,” the trader noted.

Soyoil was 62 points lower tracking losses in crude oil, Malaysian palm oil and European ****seed futures.

SOYMEAL futures ended lower following soybeans.

Corn futures on the Chicago Board of Trade fell slightly lower Friday, pressured by uncertain demand for US supplies and the advancing harvest in the US corn belt.

Lower crude oil prices also weighed on the corn market as it reduced the incentive for refineries to brew corn-based ethanol as a fuel alternative.

Many farmers in the US may soon be forced to move old-stock supplies to make way for the new harvest, an analyst noted.

A lack of rain is expected to lower Ukraine’s corn crop by 20% in 2015, according to a report.

Wheat futures on the Chicago Board of Trade posted modest gains to finish the week, seeing some light buying as investors looked for bargains before the weekend.

Weakness in the US dollar helped wheat futures reverse the slide they had been on for the past three sessions.

Egypt put out a large tender yesterday which immediately drew bids from Ukraine and France, however the US did not participate due to uncompetitive prices, according to a report.
– in Ukraine the production of grains and pulses totaled 37.574 mln tonnes in bunker weight, as of September 1, 2015.
– France has bolstered its ban on the cultivation of genetically modified crops in the country, according to a report.
AGCanada / Commodity News Service Canada

[Guest]

stats can is tool for depressing markets , that's all . like their BS story about all this imaginary canola carry over .