An Agriculture Canada canola supply and demand outlook published Thursday is bullish for canola, forecasting tight year end stocks this crop year and next.
Agriculture Canada pegged 2011-12 canola year-end stocks at 700,000 tonnes for a stocks-to-use ratio of five percent.
It increased its export and domestic use estimates for the current crop year to account for the strong pace of disappearance this year.
For 2012 it sees planted area at 20.39 million acres, up from 18.86 million last year. Some private forecasters are now talking about 21 million acres or more.
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AgCanada pegs 2012-13 canola production at 15.4 million tonnes, up from 14.165 million tonnes in the current crop year.
Despite the big increase in production, it sees stocks at the end of 2012-13 climbing to only 800,000 tonnes, still a very tight situation.
Seeded area for almost all crops is expected to rise this spring because drier conditions should allow acreage not seeded last year because of excess moisture to be brought back into production.
Agriculture Canada expects spring wheat area will rise by 10 percent, durum acreage by 13 percent, barley area by 22 percent, oats area by 27 percent, rye area by 23 percent and flax area by 10 percent.
Prices generally are expected to trend a little lower in the new crop year under pressure from a strong Canadian dollar, but are expected to remain historically high.
Agriculture Canada sees pulse and special crop area climbing nine percent, with all crops gaining except lentils, which should fall due to poorer market prospects.
It sees pea area rising 27 percent to 2.97 million acres.
Lentils would drop 13 percent to 2.22 million acres.
