Analysts surprised by StatCan’s huge increase in canola crop

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Published: December 4, 2015

Winnipeg, Dec. 4 – An upward revision to Canada’s 2015-16 canola crop was widely anticipated, but today’s Statistics Canada survey results surpassed even the most optimistic forecasts and will lead to major adjustments in the country’s supply-demand balance sheet.

StatsCan pegged canola production at 17.2 million tonnes, up about three million from the September survey estimate issued in early October and well above average trade guesses that had hovered around 15.5 million tonnes. Canada grew 16.4 million tonnes of canola in 2014-15.

“It’s a shocker,” said Ken Ball, of PI Financial in Winnipeg on the larger than expected canola production.

“It’s a game changer in a way . . . and carryout estimates will be going up, but demand estimates will also go up.”

Ball said canola was attractively priced for end users, with the futures showing only modest weakness in immediate reaction to the numbers.

“Ultimately, I think we can gobble this up,” added Mike Jubinville, of ProFarmer Canada.

He said projected exports could easily increase by half a million tonnes, while the domestic crush also has room to grow by a similar amount.

Jubinville added that the big supplies won’t necessarily result in canola prices falling to new lows, but they may keep the market rangebound and sluggish for a longer period.

“It was definitely a surprising number for canola,” said Jon Driedger, of FarmLink Marketing Solutions.

However, he believes that a home would be found for most of the extra production, “as long as we stay competitively priced.”

Most other crops also saw upward revisions from October, although the increases were less dramatic than canola.

Canada’s all-wheat production is now forecast at 27.6 million tonnes, which was up from the 26.1 million tonnes forecast in October, but still below the previous year’s level of 29.4 million.

Of that total, durum production was pegged at 5.4 million tonnes, which was up by 700,000 tonnes from an earlier estimate and also above the 5.2 million tonne crop grown in 2014.

Jubinville said the all-wheat number does little to change the larger picture for spring wheat, but said durum could come under pressure.

Barley production, at 8.2 million tonnes, was also above trade guesses and compares with the 7.1 million tonne crop grown the previous year.

 

Million tonnes 2014 Sept 2015 Nov 2015 2014 to 2015 %
Total wheat 29.420 26.061 27.594 -6.2
– Durum 5.193 4.744 5.389 +3.8
– Spring 21.298 19.054 19.962 -6.3
– Winter 2.929 2.263 2.243 -23.4
Barley 7.119 7.610 8.226 +15.5
Canary seed 0.125 0.118 0.149 +19
Canola 16.410 14.297 17.231 +5
Chickpeas 0.131 0.105 0.084 -32.1
Corn 11.487 12.204 13.559 +18
Dry beans 0.273 0.245 0.243 -10.9
Dry peas 3.810 3.156 3.201 -16
Fall rye 0.218 0.234 0.226 +3.7
Flax 0.873 0.889 0.942 +8
Lentils 1.987 2.162 2.373 +19.4
Mustard 0.198 0.109 0.123 -37.7
Oats 2.979 3.292 3.428 +15.1
Soybeans 6.049 5.928 6.235 +3.1
Sunflower 0.055 0.091 0.073 +32

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