More fuel is being added to an already hot canola market.
Statistics Canada has reduced its estimate of the 2020 canola crop to 18.7 million tonnes, nearly 700,000 tonnes below the last projection.
“You knock out 700,000 tonnes of production and you go from moderately tight stocks to intolerably tight,” said Ken Ball, a senior commodities future advisor with PI Financial in Winnipeg. “The canola market has quite a rationing job ahead for the next six months or so.”
Ball says the crush margins will likely have to get squeezed much tighter to discourage some usage. Soybeans will continue to lead the global edible oil market and provide support for canola. The Brazilian soybean growing regions require rain this month to avoid a drought.
While canola production was lower, the Canadian all-wheat harvest (including durum) is pegged at 35.2 million tonnes, the largest in seven years.
“Every grower that I know across the Prairies had superb (wheat) yields, even in areas where some of the yields struggled on other crops,” Ball said. “I’m only surprised that it didn’t go up by more.”
Pulse crop production in Saskatchewan was higher due to a larger harvested area. There is 2.5 million tonnes of lentils, up 13 percent from last year. Peas were also at 2.5 million tonnes with an average yield increase of nearly seven percent.
The Statistics Canada news release for Saskatchewan is below:
These numbers are based on a survey of 7,324 Saskatchewan farmers between October 9th and November 15th
Wheat – Wheat production in Saskatchewan rose 4.1% in 2020 to 16.0 million tonnes. This increase was the result of a 2.2% increase in harvested area to 12.8 million acres, while average yield was up 1.8% to 45.9 bushels per acre.
Canola – Total canola production fell from 11.1 million tonnes in 2019 to 10.2 million tonnes this year. Farmers reported a decline in harvested area, down 3.5% to 11.3 million acres, while average yield fell 4.6% to 39.8 bushels per acre.
Lentils – Harvested acres dedicated to lentils increased 15.0% compared with 2019 to 3.8 million acres while average yield decreased 7.6% to 1,451 pounds per acre. As a result, production of lentils increased 13.0% to 2.5 million tonnes in 2020.
Dry field peas – Dry field pea production in Saskatchewan rose 7.1% in 2020 to 2.5 million tonnes. Harvested area edged up 0.4% increase to 2.3 million acres, while average yield increased 6.8% to 39.5 bushels per acre.
Barley – Total barley production decreased 1.4% to at 4.4 million tonnes. Farmers reported a decline in harvested area, down 0.6% to 2.9 million acres. Average yield fell 0.9% to 68.7 bushels per acre.
Oats – Total oat production increased from 2.2 million tonnes in 2019 to 2.3 million tonnes this year. Farmers reported a rise in harvested area, up 9.2% to 1.6 million acres while reporting a 5.0% drop in average yield to 91.4 bushels per acre.
Flaxseed – Average flaxseed yield in Saskatchewan rose 8.3% in 2020 to 23.4 bushels per acre. Harvested area increased 16.2% to 762,000 acres. As a result, production increased 26.1% to 453,100 tonnes.
Mustard seed – Harvested acres dedicated to mustard seed fell 39.9% compared with 2019 to 168,800 acres. Average yield decreased 3.1% to 808 pounds per acre. As a result, production of mustard seed decreased 41.8% to 61,800 tonnes in 2020.