Canadian farmers will harvest less wheat than expected after dry conditions in parts of the Prairie provinces shrunk yields, a government report showed on Tuesday.
Drought is expected to send global wheat stockpiles for major exporters to the lowest levels in more than a decade, a Reuters analysis has shown.
Canada is the world's fourth-largest wheat exporter and the biggest shipper of canola, which is used largely to produce vegetable oil.
Statistics Canada , the second-lowest in eight years, and down 14% from last year. The estimate fell below the average industry expectation of 30.4 million in a Reuters survey.
"We're down significantly. We're seeing a tightening (of supplies) in the major exporters," said Bruce Burnett, director of markets and weather at MarketsFarm.
Farms in areas of North and South America, Europe and Australia face crop losses as extreme weather spreads over an unusually wide geographic area, making food production increasingly vulnerable.
Production of spring wheat, used in baking, looked to fall 14.5% to 22.1 million tons. The harvest of durum wheat, used in pasta production, is expected to plummet 26% to 4.3 million tons.
The cracked dry land of farmer Sean Stanford鈥檚 wheat field that is suffering from lack of rain and high summer temperatures is shown near Magrath, Alta. on Tuesday, July 25, 2023. (THE CANADIAN PRESS/Todd Korol)
Farmers look to produce 17.6 million tons of canola, down 6% from last year. It would be Canada's second-smallest canola crop in nine years.
The average trade estimate was 17.4 million tons.
ICE Canada November canola futures RSX3 extended gains after the report, rising 0.6%.
Oat production looks to fall by more than 50% to 2.4 million tons, Canada's smallest output since 1991.
StatsCan based its estimates on satellite and agroclimatic data as of July 31, before much harvesting had taken place. It will release new estimates on Sept. 14 using data as of Aug. 31.
(Reporting by Rod Nickel in Winnipeg; editing by Jonathan Oatis)
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