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Agriculture and Agri-Food Canada’s (AAFC) report forecasts Canola prices to be in range between $465-495/t down from $497/t last year.
Weaker price outlook is reported despite steady seed and product Consumption estimates of canola, even in the face of Covid-19 virus. Domestic processing of canola has been estimated at a record 9.8 MT, versus the 9.3 MT processed in 2018-19.
The crush pace to-date, as reported by Statistics Canada, is running ahead of last year. It had been assumed that canola seed and canola product consumption will remain unaffected by the coronavirus outbreak.
For 2019-20, canola supplies decreased marginally to 22.6 million tonnes as high carry-in stocks are more than offset by lower production. Some canola remains unharvested due to a wet, late fall.
Reports suggest some deterioration of crop quality and yields is occurring due to rodent damage and intermittent freezing and melting.
Meanwhile, Canola exports are forecast to fall to 9 MT, versus the 9.14 MT shipped in 2018-19. For the crop YTD exports through licensed facilities are running 8% behind last year’s pace. However shipments into the European Union almost quadrupled last year’s pace in response to last summer’s drought and reduced yields across the EU-28.
Exports into the Asian region are two-thirds of last year’s pace as a sharp decline in shipments to China is partly offset by increased shipments into alternate price sensitive countries. Shipments into the western hemisphere are running 26% behind last year.
Carry-out stocks are forecast to fall to 3.3 MT, versus 3.8 MT for 2018-19. Production is forecast to fall slightly to 18.5 Mt versus the 18.6 MT grown last year. Total supply is forecast to fall to 21.9 MT on lower carry-in stocks and lower output.
However for 2020-21, seeded area in Canada is forecast to decrease by 2% to 8.3 million hectares, as farmers shift into alternative crops away from oilseeds. Harvested area is forecast at 8.2 million hectares while yields are projected at 2.25 tonnes per hectare (t/ha), up marginally from the 2.24 t/ha achieved in 2019-20.
Exports are forecast up by 6% to 9.5 MT on support from the slow and steady growth in world consumption of vegetable oils and high oil content oilseeds. Domestic crush is forecast to fall slightly to 9.3 Mt, due to competition from large world soybean oil and palm oil supplies.
Carry-out stocks are forecast to tighten slightly to 2.8 MT for a stocks-to-use ratio of 14% supporting a rise in canola prices to $480-520/t in 2020-21
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