Agriculture Canada has trimmed its 2021 canola production estimate in response to the hot, dry conditions prevailing across large parts of the Prairies - although further downside is still likely ahead.
In updated monthly supply-demand estimates released Tuesday, Ag Canada pegged this year’s crop at 19.885 million tonnes, down from the June estimate of 20.05 million but still above the previous year’s output of 18.72 million.
The reduction in expected production comes despite Statistics Canada’s June acreage report, which raised this year’s canola planted area estimate to 22.47 million acres from April intentions of 21.52 million. With the larger planted area, harvested area is projected at 22.34 million this month, versus 21.39 million in June. Ag Canada is estimating this year’s average canola yield at 39.3 bu/acre, down from 41.4 bu last month and 40.1 bu in 2020.
“Final (canola) yields will be determined by weather conditions going forward, with slightly below normal yields expected if temperatures and rains return to normal and sharply lower yields expected if conditions remain hot and dry,” Ag Canada said. Over the past 20 years, Canadian canola yields have ranged from a low of 22.3 bu/acre in 2002 to a high of 42.3 bu in 2016. Final 2021 canola production remains uncertain but reports suggest major Prairie yield reductions already due to drought and searing temperatures.
With the smaller expected 2021 crop, total new-crop canola supplies are estimated at 20.735 million tonnes this month, down from 20.9 million in June.
On the demand side, Ag Canada reduced its 2021-22 export forecast by 100,000 tonnes from last month to 9.9 million – down 1 million from the current year – to reflect the smaller crop. The projected domestic canola crush, however, was left steady from last month at 10 million tonnes, a drop of 200,000 from 2020-21.
New-crop canola ending stocks are projected at 700,000 tonnes this month, down 50,000 from June and identical to projected 2020-21 ending stocks. However, the average projected new-crop canola price is up to $750/tonne from $680 in June and $725 in 2020-21.
Source: DePutter Publishing Ltd.
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