Statistics Canada pegged surprisingly large 2013-14 production figures for many of the crops grown in the country in its final crop report of 2013, released Wednesday.
"There's just no getting around it, this is the biggest crop of Canadian history and it's basically a shocker all around," said Mike Jubinville of ProFarmer Canada in Winnipeg. "I really can't think of a crop, other than peas and lentils, that didn't provide an upside that betters what trade expectations were."
Perhaps the most surprising figure was the 37.53 million-tonne production estimate for all wheat. Statistics Canada previously estimated 2013-14 all wheat production would total 33.03 million tonnes. In 2012-13, 27.21 million tonnes were grown.
The canola production estimate of 17.96 million tonnes was at the highest end of expectations, but just as shocking to the trade.
"We would've expected maybe 17 million tonnes, and the trader would've just said 'It's bigger than that still,'" said Jubinville. "But in this case, it is what it is."
StatsCan previously pegged canola production at 15.96 million tonnes for the 2013-14 crop year. There were 13.87 million tonnes of canola grown in Canada last year.
Durum wheat, oats and barley were also above expectations, with even larger than anticipated yields behind the increases for all crops.
"Just no way"
Because all of the crops are so huge, it won't be possible to move the entire crop this year, Jubinville said.
"We're going to argue all we want about rail car allocations, about slow deliverable opportunities, but there's just no way that the Canadian commercial handling system can move this crop," he said.
He added that farmers may not be able to deliver some types of wheat until next year now because some grain companies are placing priorities on hard red spring varieties.
Because there just isn't enough capacity to get everything moved this year, there will also likely be larger than anticipated carryover stocks of all crops.
For canola, carryout stocks could be larger than three million tonnes, said Ken Ball of PI Financial in Winnipeg, adding that previous guesses were in the 1.6 million- to 1.8 million-tonne range.
With logistical issues, the huge supplies and large expected carryout figures, prices for most crops will likely drift lower going forward.
"You're seeing basis levels weaken on all crops, but wheat to me is one that is a particular standout," said Jubinville. "These are probably going to be the widest basis levels that we may see ever."
Canola prices were also taking a hit, with the ICE Futures Canada canola market moving lower in reaction to the surprisingly large production number Wednesday morning.