Statistics Canada stocks report backs canola crop estimate

Statistics Canada’s Dec. 31 crop stocks report appears to reinforce its official canola crop production estimate issued in December of 18.4 million tonnes.

Arriving at the production number was complicated by the late harvest as producers were still taking off crop when StatCan called for the survey. Some canola will sit in fields until spring.

Some analysts believe the crop is closer to 19 million tonnes. Certainly the record pace of domestic crush and exports indicate that users are having no trouble getting canola from growers.

But the Dec. 31 stocks number issued last week gives us a way to test Statistics Canada’s production figure, which is used in Agriculture Canada’s supply and demand table.

That table pegged production at 18.4 million tonnes, the carry in at two million tonnes and imports at 100,000 tonnes for a total supply of 20.5 million tonnes.

The Dec. 31 stocks number was 12.16 million tonnes. Put another way, that is what remains of the total supply after the exports and crush to the end of December.

If you add the exports and crush to the Dec. 31 stocks, that implies what was the total supply.

And when you do the math you get 20.29 million tonnes, and that is pretty close to total supply in the Agriculture Canada supply and demand figures.

It is still possible to argue that the Dec. 31 stocks number is not an accurate reflection of total stocks on that date. The survey asks about on farm grain in permanent and temporary storage but it might not reflect grain sitting unharvested in fields.

So the debate will continue but regardless, if the record pace of exports and domestic crush continues, canola stocks at the end of the crop year should not be a burden.

Canada’s canola export sector will face stronger competition from Australia in coming months.

Australia’s government forecaster said the country harvested great crops this year.

Canola production rose 22 percent to 3.6 million tonnes, its third largest crop ever. About 80 percent of Australia’s canola exports go to the European Union where it is used mostly in the biofuel market, with the meal going to livestock feeders.

Europe had bad luck with its last two rapeseed crops. Production last year fell to 20 million tonnes, down from 22.2 million the year before and 24.6 million in 2014-15.

This forced it to increase its rapeseed imports by about a million tonnes.

Because of Europe’s reluctance to buy genetically modified crops, Canada is not its first choice for supply. Australia and Ukraine are key suppliers, but Canada does sell some there.

European countries imported about 432,000 tonnes of Canadian canola in 2015-16, up from only 76,500 the year before.

This crop year, to the end of December they have bought 378,000 tonnes, up from 253,000 in the same period last year.

Europe’s rapeseed crop is in winter dormancy but Strategie Grains has trimmed its 2017 production outlook by 500,000 tonnes because of extreme cold in eastern countries. But at 21.56 million tonnes it would still fall short of meeting domestic needs.

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