ICE weekly outlook: Canola carryover looms ahead of harvest

MarketsFarm — There’s a large canola carryover on farms and little of the soon-to-come 2019 crop has been sold, according to Winnipeg-based analyst Bill Craddock.

“Farmers think the price is too cheap,” he said.

However, the price has come down, from about $11 per bushel to around $9.50, he added, noting there likely won’t be “a lot of selling off of the combine.”

“I’m expecting shorter lines at the elevator this fall,” he said.

And while canola exports are down by about one million tonnes due to the ongoing Canada/China dispute, domestic crush was up by about 300,000 tonnes, he said.

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With swathing and combining of canola just getting underway on the Prairies, estimates for this year’s production include 18.58 million tonnes, by Agriculture and Agri-Food Canada, and 19 million tonnes, from the recent Farm Link crop tour.

MarketsFarm estimated production to be 17.85 million tonnes, taking into account the slow start to planting this year and the coming threat of frost.

Last year’s canola production was 20.34 million tonnes, according to AAFC.

The 2019-20 carryover has been projected at about 3.96 million tonnes, up slightly from the previous crop year’s 3.9 million.

— Glen Hallick writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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