By Angie Rolheiser

Canola production significantly down from last year

Dec 4, 2020 | 10:06 AM

MELFORT, Sask. – More fuel has been added to an already hot canola market.

Statistics Canada estimates canola production at 18.7 million metric tonnes, that is down 4.5 per cent from last year and below trade expectations. It’s also nearly 700,000 tonnes below the previous StatsCan estimate.

Ken Ball is a senior commodities futures advisor with PI Financial in Winnipeg, he figures some of the drop was due to acreage reductions because of all of the issues in Alberta in the spring.

“They probably had not fully accounted for those acreage loses in north and northwest Alberta,” Ball said. “Some would have been due to yield; my yield survey and many others didn’t show any big changes but some possible minor changes.”

Overall, Ball thought there was a healthy canola crop on the prairies and many thought the number would come down but only a bit.

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This will mean having to stretch out canola supplies until the 2021 crop comes off next fall.

“The absolute price will have to stay very strong because some buyers buy on a basis of margin and some buy on a basis of price alone,” Ball said. “Canola is already quite high so it is probably discouraging for some buying already.”

How much it goes up in price will depend on what the soy markets do, if they come down it may mean that canola comes down more slowly and a lot less. If soy markets reignite, canola could have a lot of upside.

While canola production was lower, the Canadian wheat harvest is pegged at 35.2 million tonnes which is the largest in seven years.

“Canada had a phenomenal wheat crop this year, every grower that I know across the prairies had superb yield even in areas where some of the yields struggle in other crops,” Ball said. “I am surprised it didn’t go up by more, the world is still beyond amply supplied with wheat.”

The big jump in the Australian crop this week and now a little bit of a jump in the Canadian crop number, the world is very heavily supplied with wheat for another season, according to Ball.

Pulse crop production in Saskatchewan was higher due to a larger harvested area.

Lentils were 2.5 million tonnes and up 13 per cent from last year. Peas were also at 2.5 million tonnes, with an average yield increase of nearly seven per cent.

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angie.rolheiser@jpbg.ca

On Twitter: @Angie_Rolheiser