The USDA's second production reflected the deterioration of crop conditions during May. It placed average yield at 44.1 bushels per acre (2.97t/ha) down from 45.4 bushels per acre a month earlier. Area is up 2% but is not large in an historic context. Production was placed at 42.1Mt, 3% above last year, but 2% less than the previous 10-year average. Further significant revisions should not be expected as much of the crop was close to harvest when the estimate was made.

The US spring wheat area has been on a steady decline in recent years. But this year’s prospective plantings survey indicated that the other (than durum) spring wheat area will increase. This was no doubt encouraged by this season's price premiums for high protein hard spring wheat, following the almost total elimination of quality Canadian spring wheat by a frost last August.

As was the case last year, planting of spring wheats was about a week ahead of average and most of this advantage has been maintained through to crop emergence (Graph 2). Early USDA reports on the crop suggest that it is in better condition than last year’s at this time.

Prospective plantings of durum were down for a sixth successive year. Actual plantings have also trended lower. Durum is proving to be a very challenging market for the US which is expected to be a net importer this year, with carryover stocks rising to almost 50% of production.

The tug of war between maize and soyabeans for area continues, with the combined area at a record. Prospective maize area is up 3% and soyabean area down 2%. The potential maize area has increased as new, more drought tolerant varieties have provided farmers with the option of substituting maize for sorghum in more drought prone situations and as soft red winter wheat has tended to lose ground to maize on economic considerations.

For a second successive year US sowing of maize got off to a very early start in the mid-western Corn Belt. But in contrast to last year, cool conditions this year seem to have delayed the germination of maize, which was not much ahead of average (Graph 3). But this does not seem to have had a material impact on crop conditions which are above average but not as favourable as last year.

The planting of US soyabeans is all but complete and with crop emergence to date has been relatively early. In the first of its weekly reports for soyabeans the USDA suggests that the crop is in average condition. There will be particular interest in the development of the US soyabean crop this year as it will for the first time require fungicide protection from Asian Rust.

Statistics Canada’s March 31 Seeding Intentions survey report suggests a reduction in canola and expansion in oats and summer fallow area on the Canadian Prairies and lower maize area in eastern Canada (Table 1). After several years of relatively tight canola supplies farm stocks have risen this year. With almost 3.0Mt, double year earlier levels and the equivalent of 45% of the 2004 crop, still on farm at March 31, farmers were undoubtedly looking for other sowing options.

The increase in the intended area of oats probably reflects favourable prices this season. Especially as heavy oats which are suitable for milling have a relatively short growing season of oats. The survey also suggests an increase in summer fallow.

In eastern Canada farmers indicated they would cut back on maize acreage. Not only have US prices declined from year earlier levels but the US/Canadian dollar exchange rate which has a very immediate and direct effect on Canadian prices has been working against profit potential for farmers in eastern Canada. But it is not clear how the diverted area is going to be used as intended soyabean area is unchanged.

Crop development has overall been relatively favourable on the Prairies so far this spring, but probably not as good as it was last year. And conditions have been far from perfect for some, too dry in central Alberta and too wet in western Manitoba. But sowing advanced favourably with only the need to finish last year’s crops in a few northern areas and some cooler than usual weather delaying planting, which is now virtually complete. No significant yield potential has been lost at this time.

David Walker 01603 705 153