A hefty decline in canola stocks as of March 31 compared to a year earlier has tightened the outlook for old- and new-crop canola considerably.
In updated supply-demand estimates released by Agriculture Canada on Friday, projected 2019-20 canola ending stocks were lowered a major 600,000 tonnes from last month to 2.6 million – now 32% below the previous year. Meanwhile, the smaller carryover from the old-crop marketing year was more than enough to offset a minor increase in expected 2020 canola production, putting 2020-21 ending stocks at 2.3 million tonnes, a drop of 400,000 from the April estimate.
Today’s supply-demand estimates incorporate the May 7 Statistics Canada grain stocks report as well as the 2020 acreage report.
The grain stocks report put nationwide canola stockpiles as of March 31 at 8.92 million tonnes, down 12.3% from a year earlier and the tightest stocks level for that date since 7.92 million tonnes in 2017. To reflect that decline, Ag Canada raised its 2019-20 export forecast by 500,000 tonnes from April to 9.6 million, while total domestic use was bumped up to 10.43 million tonnes from 10.28 million.
On the new-crop side, Ag Canada raised its 2020 production estimate to 18.725 million tonnes from 18.5 million a month earlier, mostly due to a slightly larger new-crop planted estimate of 20.61 million.
Ag Canada’s old- and new-crop canola price forecasts were both unchanged from last month at $465-495 and $480-520/tonne, respectively.
In other supply-demand changes, 2020-21 all wheat ending stocks were raised 100,000 tonnes from last month to 6.8 million, still up sharply from the 5.9 million tonnes forecast for 2019-20. The all wheat seeded area was lowered from last month, but an upward revision in this year’s expected average yield kept estimated production unchanged from April at 33.9 million tonnes. Projected all wheat exports were raised to 24.1 million tonnes from 23.9 million last month but that was partially offset by a smaller domestic use estimate.
The average expected old-crop wheat price forecast was raised $5 from last month to $260-280/tonne, and the new-crop forecast was raised $15 to $255-285.
Old-crop oat ending stocks were revised up to 670,000 tonnes from 550,000 in April in the wake of an upward adjustment in 2019 production and a lower export forecast. New-crop ending stocks were hiked to 1.1 million tonnes from 900,000 in April, as a slightly lower new-crop production forecast helped to offset the heavier old-crop carryin.
The average expected old-crop oat price of $250-280 was raised $5 from last month, while the new-crop forecast was increased $10 to $210-240.
The old- and new-crop barley ending stocks estimates were unchanged from last month at 1.7 million tonnes each.
Source: DePutter Publishing Ltd.
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