Statistics Canada last week confirmed that this year’s canola crop is a major disappointment.
Hopes for a record large crop were dashed by summer heat, disease and wind.
The 13.36 million tonne crop forecast by Statistics Canada is almost eight percent smaller than last year.
But the more telling number is the average yield, which at only 28.2 bushels per acre is the lowest since 2004’s 28.1 bu. per acre.
This breaks, at least for one year, the crop’s reputation as the resilient kid, able to weather whatever nature throws at it and still post a yield in the mid-30s.
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The story is not done yet. The Statistics Canada survey on which the production report is based was carried out Sept. 4-11 and so missed the gale force winds in the middle of the month that pushed swaths around and caused seed heads to shatter.
The final tally on the 2012 canola crop could be hundreds of thousands of tonnes less.
Statistics Canada revised its number for the 2011 canola crop to 14.493 million tonnes, an increase of 328,000 tonnes from the previous estimate.
This marries up with the year-end stocks report indicating that, given the amount of canola sold last year, the 2011 crop had to be bigger than what had been assumed.
Agriculture Canada, using the July canola forecast of a 15.4 million tonne crop, had forecast in September that 2012-13 year end stocks were going to fall to a razor thin 675,000 tonnes. Demand will have to be lowered now that the crop is smaller.
The question is, will the export market or domestic crushers take less?
Crushers have already processed 130,000 tonnes more than last year at the same time, and their crush margins have been attractive enough to keep them busy.
Meanwhile, grain companies have lined up an aggressive export program.
There will be a mighty battle to get farmer’s canola seed, but don’t think the sky is the limit. We don’t talk about palm oil a lot, but it makes up a huge part of the lower price end of the oilseed complex.
Palm oil stocks are high and are depressing vegetable oil prices.
Also, the U.S. Department of Agriculture’s monthly crop production report released Oct. 1 could show that soybeans were not hurt by the Midwest drought as much as first thought. (See our daily canola market story on Producer.com and Producermobile.com for same day coverage of the USDA report).
The Statistics Canada report also showed that the weather dealt barley a heavy blow. The crop is now pegged at 8.59 million tonnes, down 900,000 tonnes from the July forecast.
The average barley yield is 58.2 bu. an acre, the lowest since 2007’s 51.1 bu.
Agriculture Canada, using the July crop forecast of 9.5 million tonnes, had forecast 2012-13 ending stocks climbing to 2.4 million tonnes from 1.22 million at the end of 2011-12, but stock building is unlikely now, given the smaller crop.
As for other crops, spring wheat is slightly smaller than the July estimate and durum is a little larger.
Oats are about the same as the July estimate, but peas are down 240,000 tonnes, which could support the price.
Flax is a little smaller than in the July forecast, but it’s still a big increase over last year.
The lentil production outlook is about the same as the July forecast.
