The snow, rain and cold and the forecast for below normal temperatures in mid-October raise the question of whether all the crop still in the field will be harvested.
This is particularly important for canola because of a tight supply-demand ratio.
Analysts believed that there was more canola grown this year than the 10.27 million tonnes Statistics Canada forecast in September. They expected Statistics Canada’s final production report of the year, due Dec. 3, would raise the canola crop to more than 11 million tonnes.
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But as of Oct. 5, 65 percent of canola had been harvested in Saskatchewan and 34 percent had been swathed. So about a third of the five million tonnes of expected Saskatchewan canola production was still in the field when the snow hit. It now will be harder to harvest the final 1.65 million tonnes just in Saskatchewan.
The weather will likely improve at some point and harvest will resume, but those expectations of more than 11 million tonnes of canola might have to be scaled back.
Agriculture Canada released a new supply and demand outlook on Oct. 8 based on Statistics Canada’s September production survey.
Agriculture Canada predicted that the carry-in of 1.66 million tonnes, plus production of 10.27 million, would result in total supply of 12.08 million tonnes.
It projects exports of six million tonnes and domestic use of 5.33 million, drawing down the 2009-10 carry-out to 750,000 tonnes. That is the smallest carry-out since 2003-04 and is about half of what ending stocks were in the two previous years, an outlook that should support prices.
The export number is still healthy, but less than the 7.9 million tonnes shipped last crop year, which isn’t surprising considering the crop is down from last year’s 12.64 million tonnes.
The domestic use number is up about 15 percent from last year. Agriculture Canada sees five million tonnes of crush, up 720,000 tonnes from last year, reflecting demand from new crushing plants.
Cargill is already operating its second plant at Clavet, Sask., and Louis Dreyfus-Mitsui in Yorkton, Sask., is expected to open in November.
Given that each of these plants have a capacity of more than 800,000 tonnes a year, Agriculture Canada’s forecast might be a little conservative, but in the context of the current Statistics Canada production estimate, there isn’t a lot of wiggle room.
However, even if farmers can get what is left in the field into the bin, there is unlikely to be a burdensome carry-out into 2010-11.
