Source: Agriculture and Agrifood Canada

INTRODUCTION

Agriculture and Agri-Food Canada forecasts that total production of grains and oilseeds in Canada will decline by 8% from 2005-06, to 61 million tonnes (Mt), slightly above the 10-year average. While crops got off to a good start in the spring because of the early seeding and good soil moisture, the weather subsequently turned hot and dry across most of the Prairies. Crop development is generally ahead of normal. Yields are expected to be at trend to slightly below trend in western Canada. Quality of all crops is expected to be above average, with a better than normal grade distribution. Protein levels in wheat and barley are expected to be higher than average, while canola and flaxseed oil content may be below normal. In eastern Canada, the weather has been hot but moisture has generally been adequate, and yield prospects are good.

In western Canada, production is forecast to decline by 10%, to 46 Mt, with eastern Canadian production
down by 3%, at 15 Mt. Domestic use is expected to increase in 2006-07 due to increased ethanol production.
Exports are also expected to increase by 10%, due mainly to higher exports of non-durum wheat. Prices for
all crops are expected to be similar to or higher than in 2005-06, except for flaxseed. Prices will continue to be
pressured by the strong Canadian dollar. The major factors to watch are: US and Canadian crop
development and harvest conditions, the bio-fuel market, ocean freight rates and the Canada/US exchange
rate.

Full report: http://www.seedquest.com/News/releases/2006/pdf/16540.pdf