(Resource News International) — Supplies of Canadian canola at the
end of the 2007-08 crop year are expected to either be
very tight or ample, with the opinion varying significantly from
individual to individual.
Projections for Canada’s canola
carryover in 2007-08 ranged from as tight as 1.1 million tonnes to as high as 1.9 million.
Ending stocks of canola in 2006-07 totalled 1.820 million
tonnes.
“I am expecting Canada’s 2007-08 canola ending stocks to be
around the 1.900 million-tonne level,” said Tony Tryhuk, vice-president
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He based his large ending stocks forecast on Canada’s
2007-08 canola exports only coming in at 4.85 million tonnes and
Canada’s canola production estimate from Statistics Canada being
understated by as much as 400,000 tonnes.
Statistics Canada, in its October production survey,
estimated 2007-08 canola production in Canada at 8.864 million
tonnes, which would compare with nine million during 2006-07.
Tryhuk said the canola export estimate was down from his
original ideas, and reflected the slow pace of sales to date.
“There is lots of canola on farm, there is lots of canola in
commercial position, and there just has not been the demand from
the export sector to absorb those supplies,” Tryhuk said.
He said
the strong Canadian dollar was a factor in the reduced canola
export picture.
He also felt Chinese demand has not been as great as
had been expected by the industry,
“My original estimates had China purchasing as much as 1.5
million tonnes of Canadian canola during 2007-08, but I am now
reducing that forecast to closer to 800,000 tonnes,” Tryhuk said.
Meanwhile, Mike Jubinville, an analyst with the farmer advisory
service ProFarmer Canada, felt exports of
Canadian canola during 2007-08 would still be in the 5.4 million-tonne range, and that countries like China should not be counted
out yet.
“China has a record of surprising people, and is still very
much a card that is in play in terms of how much canola it could
still buy from Canada,” Jubinville said.
The export picture and strong domestic demand, meanwhile,
were expected to result in Canada’s 2007-08 canola carryover
dropping to as low as 1.1 million tonnes, Jubinville forecast.
“Strong domestic processor demand will help to absorb
Canada’s canola supply,” Jubinville said, estimating Canada’s
crush at a record four million tonnes.
During the 2006-07 season, Canada domestic processors
crushed a record 3.579 million tonnes of canola.
Chris Beckman, an oilseed analyst with the market analysis
branch of Agriculture and Agri-Food Canada, felt Canada’s
canola ending stocks in 2007-08 would be around the 1.3 million-tonne level.
He estimated Canada’s domestic crush at 3.750 million tonnes
and felt Canada would still be able to export 5.5 million tonnes of
canola during 2007-08.
“I may be a bit conservative in my domestic crush forecast
and I may be willing to adjust that estimate upwards to reflect
the strong demand from the processing sector so far in 2007-08,” Beckman said. “But not at this time.”
Beckman also cautioned about ruling out Chinese demand for
Canada’s canola, noting that the country has a habit of showing
up when it was least expected.
Tryhuk acknowledged domestic demand for Canada canola
will help to absorb some of the supply base, but the higher-than-expected production estimate will offset that usage.
“I think when the final crop production estimates are
released in December by the government agency, there will be a
lot more canola produced than had been expected,” Tryhuk said.
