Ag Canada Still Assuming Normal Canola Yields, but Cuts Production Estimate

Agriculture Canada has revised down its new-crop canola production estimate, although it is still assuming trend yields for this year.

In updated supply-demand estimates released on Friday, Ag Canada pegged the 2019 Canadian canola crop at 18.57 million tonnes, down from the June estimate of 18.9 million and below the previous year’s 20.34 million. The reduction is due to Statistics Canada’s June acreage report, which lowered this year’s canola nationwide canola seeded area estimate to 20.95 million acres from Ag Canada’s previous forecast of 21.31 million.

In its accompanying comments, Ag Canada said it is assuming “a normal rate of crop abandonment and normal yields.”

After continued drought through the spring, moisture conditions improved across the Prairies in late June following a series of rainstorms across southern Saskatchewan. However, soil moisture remains deficient across large parts of Manitoba and southern Alberta, the government said. Yields will be more dependent than usual on rains during the months of July and early to mid-August, it said, adding that any revisions to yield estimates are “likely to be downwards.”

With new-crop production and total supplies declining from June, Ag Canada now sees 2019-20 canola ending stocks at 3.975 million tonnes, down from 4.3 million last month but still up from the already hefty old-crop canola ending stocks projection of 3.9 million.

Projected 2019-20 canola exports (9 million tonnes) and total domestic use (9.6 million tonnes) were left steady from last month, although the two estimates remain down from the old-crop estimates of 9.3 million and 9.76 million.

The new-crop export forecast continues to contain a high degree of uncertainty and hinges on the outcome of the Canada-China trade discussions currently underway, Ag Canada acknowledged.

In other supply-demand changes, Ag Canada trimmed its durum production estimate to 5 million tonnes from 5.15 million in June, due to a slightly lower seeded area in the June StatsCan acreage report. Projected ending stocks fall to 1.1 million tonnes, versus 1.3 million in June and 1.6 million for 2018-19.

Wheat (excl durum) output is estimated at 27 million tonnes this month, down from 28.7 million in June (but up from 26 million a year earlier), with ending stocks hacked to just 4 million tonnes – way down from 5.4 million in June but still above estimated 2018-19 ending stocks of 3.6 million.

At an estimated 1.5 million tonnes, projected new-crop barley ending stocks are up slightly from 1.45 million in June and 900,000 the previous year, while oat ending stocks are seen rising to 600,000 tonnes, up 100,000 from June and above 450,000 for 2018-19. For both oats and barley, Ag Canada raised its 2019 production estimates from June based on larger seeded areas.

Source: DePutter Publishing Ltd.

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