Improvements in grain prices mean expected losses due to this year's flooding won't be as high as originally thought.

BMO Captial Markets has revised its estimate of summer flood damage costs from 3 billion dollars to 1.5 billion. Manitoba farmers saw losses of around 500 million dollars while the excess moisture reduced Saskatchewan producers' income by around 1 billion dollars.

The revision is largely due to increased market values.

"Prices for some of the major grains improved considerably as a result of shortfalls in production in major producing and exporting regions," says Kenrick Jordan, senior economist with BMO. "This includes Russia and Ukraine, both of which imposed restrictions on exports. That provided a boost for prices. The better prices allowed us to come up with an estimate that was a lot smaller than initially anticipated."

~ Friday, December 3, 2010 ~