In its first peas production report for 2018, on Friday, August 31, Statistics Canada estimated this year’s Canadian peas crop at 3.64 MMT. This is down 12% year-over-year and down 9% compared to the 5-year average. Additionally, the average pre-report guesstimates range was 3.7 to 3.8 MMT. Thus, this can be viewed as a bullish development for Canadian peas.
The projected decrease in peas production is the result of seeded acres dropping by 12% to 3.6 million acres (as reported in the June 2018 StatsCan acreage report). In contrast, average yields are expected to improve 2% year-over-year to 37.8 bushels per acre.
There is a big question in this report that hasn’t been answered though: how has August’s Canadian weather impacted peas yields and production. We need to bear in mind that the StatsCan survey was conducted in July. Since then, the Canadian Prairies have been pretty dry and crops were under significant heat stress.
Therefore, we might expect to see the yield and production numbers in the September 19th data/model-based estimates of Canadian crop production come in a bit smaller than what we’re seeing here today. Our gut says that these numbers might be 5-10% smaller than what the August report is showing.
The other thing to keep in mind is that the August production estimate from StatsCan for peas tends to be, on average, 10% below the final production number released in December. This usually amounts to 36,000 MT more than what is published in the August report.
While we take government estimates (especially those from StatsCan) with a grain of salt, this one might take a full shaker-worth since the August weather might be so impactful.
To sum up, StatsCan Report Today was bullish for Canadian peas and continues to support our conviction for high prices..