NEW DELHI, Jan 22 (Commoditiescontrol) - Canada's canola production in the 2023-24 crop year starting from August 1 is estimated to rise by nearly 2% from 18.17 million tonnes (Mt) in the 2022-23 crop year to 18.5 million tonnes, according to AAFC’s latest January 2023 outlook report.
For canola, the crop year starts on August 1 and ends on July 31.
For 2023-24, canola area is forecast to rise slightly to 8.8 million hectares (Mha) as support from attractive prices is matched by similarly attractive prices for alternate crops such as wheat and peas. Production is forecast at 18.5 Mt, assuming a normal abandonment of crop area and trend yields. Normal weather and growing conditions for the upcoming year are assumed.
Total supplies are predicted to increase to 19.4 Mt as the rise in production is moderated by a slight decline in carry-in stocks.
Domestic crush and exports are forecast similar to 2022-23 at 9.5 Mt and 8.8 Mt, respectively, on support from strong world demand for oilseeds, vegetable oils and protein meals. Normal feed, waste and dockage is assumed.
Carry-out is forecast to rise slightly to 0.85 Mt versus 0.80 Mt for 2021-22 and the five-year average of 2.26 Mt. The simple average price for canola, No. 1, track Vancouver is forecast at $875/t, down from $910/t for 2021-22 but above the five-year average of $739/t.
For 2022-23, Canada seeded 8.7 million hectares (Mha) to canola, a drop of 4% from the last crop year, resulting in a harvested area of 8.6 Mha. Yields averaged 2.11 tonnes per hectare (t/ha) versus the 2021-22’s drought-reduced of 1.54 t/ha.
Production is estimated at 18.2 million tonnes (Mt) based on a Statistics Canada survey of 27,200 farmers. By major growing province, Saskatchewan produced 9.5 Mt of canola, followed by Alberta at 5.6 Mt and Manitoba at 2.9 Mt. Total supply is estimated up from last year at 19.1 Mt, as the rise in production was partly offset by tight carry-in of stocks.
Usage of Canadian canola is forecast to return to more historically normal levels: exports are up 63% to 8.6 Mt, while domestic crush rises to 9.5 Mt versus 8.6 Mt last year. The pace of exports to November is 121% of last year based on the Canadian Grain Commission data, with shipments to China and Mexico accounting for 80% of the canola exported out of Canada by the end of November. Oil content of Canadian canola is averaging 42.8% to date, based on a harvest survey of 1,866 samples, of which 93% graded Number 1.
Carry-out stocks are down to 0.80 Mt for a stocks to-use ratio of 4%. Canola prices are forecast to decline to $910/tonne (t) track Vancouver. If realized, this would be the second-highest canola price on record.
The 2022-23 outlook remains sensitive to several factors: (i) world macroeconomic outlook with a strong possibility of recession, (ii) strength of world demand for vegetable oils, (iii) pace of crush and export buying, (iv) competition from European and Australian rapeseed, Indonesian palm oil and Brazilian and US soybeans, (v) late winter and early spring North American temperature and moisture conditions, and (vi) stability of supply chains stressed by the spread of COVID-19, particularly across China, and export shipments from the Black Sea region due to the ongoing Russian invasion of Ukraine.
(By Commoditiescontrol Bureau)
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