At 3.09 million tonnes, canola stocks as of July 31, 2024, were up from 1.85 million tonnes the previous year and the largest carryout for the crop since 2020. “Higher domestic disappearance was more than offset by lower exports of canola, resulting in higher ending stocks,” said StatCan.

Canola stocks were in line with trade estimates that ranged from roughly 2.10 million to 3.50 million tonnes.

All-wheat ending stocks, which include durum, were estimated at 4.58 million tonnes. That came in well above trade estimates, as StatCan raised it’s call on the 2022/23 carryout to 5.63 million tonnes from an earlier estimate of 3.51 million tonnes.

Of the total, the durum carryout for 2023/24 was relatively unchanged on the year, up by only 2,000 tonnes at 576,000.

Barley stocks also topped average trade estimates, coming in at 1.22 million tonnes. That compares with the year-ago level of 708,000 tonnes.

For the pulse crops, lentil ending stocks were down by 15.2 per cent on the year at 179,000 tonnes, while the pea carryout dipped by 36.7 per cent at 348,000 tonnes.

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“The capacity of crush could grow from 11.3 million metric tonnes today to 18 million metric tonnes in three or four years,” said Chris Vervaet, executive director of the Canadian Oilseed Processors Association (COPA).

Vervaet was among the speakers at this year’s CropConnect conference in Winnipeg Feb. 14. His talk focused on the impact of renewable fuels on the canola value chain.

“This is unprecedented,” said Vervaet. “I’ve talked to folks who have been around oilseed processing for the better part of 30 or 40 years; they’ve never seen this kind of growth.”

Roughly 2.5 million tonnes of canola seed equivalent stocks are currently used for biofuel markets in Canada, the U.S. and the EU. Vervaet said it could grow to 5 million by 2026 and could reach as high as 8 million by 2030.

“We’re taking a stab in the dark here a bit, but we feel pretty optimistic about the role of biofuels in seed demand going forward,” he said.

To meet that demand, seven new Canadian facilities have been announced over the last three years to bolster renewable diesel production capacity.

“If it all gets built the way that it’s been described in their press releases, that could be 4 billion litres of capacity over the next four or five years,” said Vervaet.

South of the U.S.-Canada border, another 25 facilities are either operating, under construction or being planned. “If that all comes to fruition in a couple of years time, that’s close to 30 billion litres of production capacity,” said Vervaet. “This is a tremendous opportunity to see more value-added processing occur in Canada.”

–Further coverage to come. 

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Canadian canola stocks as of Dec. 31, 2023, came in at 12.9 million tonnes, which was up 1.3 per cent from the same time the previous year but slightly below the five-year average of 13.3 million tonnes. On-farm stocks were up 5.6 per cent from the same time the previous year, at 11.7 million tonnes, while commercial stocks fell 27.7 per cent at 1.2 million tonnes. Some market participants had anticipated even larger on-farm stocks, given the slower export pace during the crop year-to-date.

Meanwhile, total wheat stocks were down 10.3 per cent on the year at 20.7 million tonnes. On-farm stocks fell 11.7 per cent to come in at 16.7 million tonnes while commercial holdings were down 4.2 per cent at 4.0 million tonnes. Canadian wheat exports through the first five months of the crop year were up 2.7 per cent at 10.6 million tonnes.

Barley stocks increased to 5.5 million tonnes, from 5.2 million tonnes at the end of December 2022. The increased stocks came despite the smaller crop, as domestic usage declined 16.6 per cent on the year, according to StatCan.

Oats stocks were down 40.3 per cent year over year at 2.1 million tonnes. Pea and lentil stocks were down 15.6 per cent and 30.5 per cent respectively, at 1.8 million tonnes for peas and 1.0 million tonnes for lentils.

Corn stocks in the country were down 4.8 per cent at 11.3 million tonnes, while soybean supplies increased 9.8 per cent to come in at 3.8 million tonnes.

— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg. 

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The usage and ending stocks adjustments account for updated production estimates released by Statistics Canada earlier in the month.

With canola production up by nearly a million tonnes from earlier estimates, at 18.328 million tonnes, canola ending stocks for 2023/24 were raised to 1.450 million tonnes from 1.000 million in November. That compares with the 1.506 million-tonne carryout reported the previous year. Canola exports were left unchanged at 7.700 million tonnes, which would be down slightly from the 7.954 million tonnes in 2022/23. Meanwhile, domestic usage for canola was raised by about 500,000 tonnes, to 10.784 million and roughly on par with 2022/23.

Projected wheat ending stocks were only up by 350,000 tonnes from November, at 3.950 million tonnes, despite a two million tonne increase in production to 31.954 million tonnes. Wheat exports for the marketing year are now forecast at 23.200 million tonnes, from 21.300 million in November and 25.666 million a year ago. Domestic wheat usage was down slightly from November and the year-ago, at 8.587 million tonnes.

Other highlights of the report included a 200,000 tonne increase in the barley carryout, to 750,000 tonnes. Pea ending stocks are forecast to be much more comfortable than earlier estimates, now at 570,000 tonnes from 275,000 tonnes. However, the projected lentil carryout was cut in half to only 50,000 tonnes.

— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg.

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Excessive heat during the flowering period in June and July caused canola prices to climb higher, but the market is now getting a better handle on yields with the crop looking in decent shape in many areas, said analyst and trader Jerry Klassen of Resilient Commodity Analysis.

As a result, fund traders were liquidating long positions and taking some of the risk premium out of the market, according to Klassen. He added that commercial buyers were anticipating an increase of farmer selling by the end of August, when the harvest pressure starts to build, causing export interest to back away from the canola market for the time being.

 However, MarketsFarm analyst Bruce Burnett said harvest pressure may not be that large this year, as producers anticipating higher prices will likely only sell enough to meet their cash flow needs and stick most of their crops in the bin.

 From a chart standpoint, the November canola contract fell below its 20-day moving average during the week, with the selloff causing the relative strength index to move from oversold into neutral territory.

— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg.

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Canadian canola stocks as of March 31 were pegged at 5.95 million tonnes by Statistics Canada in a report released Tuesday. That was up from 5.16 million at the same time the previous year, but well below the five-year average of 8.76 million. Of the total, commercial stocks of 1.28 million tonnes were down by about 460,000 tonnes from the same point the previous year and below pre-report expectations.

“It appears that supplies will be quite a bit tighter going into the new crop,” said Ken Ball of PI Financial in Winnipeg. He questioned why the missing stocks hadn’t appeared in previous reports but speculated the 2022-23 production may have been overstated.

Canola crush margins are still relatively wide but have lost about $20-$30 per tonne over the past week and are well off their highs near $300 per tonne seen earlier in the year, as the strength in canola came at the same time as soyoil moved lower.

Looking ahead, while canola could be due for more strength, any moves will be relative to the soy complex. Soybean planting in the U.S. is progressing rapidly, and Ball expected monthly supply/demand data due out Friday from the U.S. Department of Agriculture would be bearish for prices.

The Canadian Prairies also generally have good moisture for germination, but seeding has been more varied. Ball said some of his clients had yet to start planting, while others were already past 50 per cent complete.

About half of the Prairies will likely need some follow-up precipitation in the next two to three weeks, he added, with that weather uncertainty another supportive influence on prices.

— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg.

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The commission’s report issued Thursday showed a mere 800 tonnes of canola were shipped overseas. The week before, 128,300 tonnes were outbound.

“We’re really getting close to running out,” said Quorum Corp. president Mark Hemmes of the available canola. “They’re going to put the rest of (what’s available) into the crush.”

Hemmes estimated there were about 13.8 million tonnes of canola in supply for 2021-22. Of that, 4.7 million were exports of canola seed with another four million in canola meal and oil.

Canola exports were fairly decent in September and October 2021, he said, but by February of this year there was little left to move out.

“Everybody I talked to fully expected that by the time we got to April, there wasn’t going to be much left. That turned out to be true,” Hemmes said.

As of March 27, that 4.7 million tonnes of the Canadian oilseed was 51 per cent of exports the same time a year ago, according the CGC’s grain statistics weekly. At this point in the marketing year, domestic usage tallied a little below 6.1 million tonnes, sitting at 86.5 per cent of total domestic consumption at week 34 of 2020-21.

The 800 tonnes of canola exported last week was by far the marketing year low, handily beating out the previous low of 6,200 tonnes in week 3, according the CGC’s reports. The marketing year high was hit in week 15 at 304,900 tonnes.

Edmonton-based Quorum Corp. is an independent third party that tracks grain movements across the Canada, monitoring the system’s efficiency and reliability.

— Glen Hallick reports for MarketsFarm from Winnipeg.

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Farmers delivered 422,500 tonnes of canola during week 45 of the 2018-19 crop year — down slightly from the previous week, but well above the year-to-date weekly average of 364,000 tonnes.

Total visible supplies reached 1.029 million tonnes, up from 909,000 tonnes the previous week, and the first time stocks were above one million since May 5.

Canola exports of 144,000 tonnes during the week were off the year-to-date weekly average of 185,000 tonnes. Total exports, with only seven weeks to go in the crop year, reached 8.045 million tonnes, roughly 900,000 tonnes off of the previous year’s pace.

Domestic usage was also low on the week at 140,200 tonnes — about 40,000 tonnes below the average weekly pace. Total domestic usage to date, at 8.107 million tonnes, remains in line with the 2017-18 pace.

While canola exports may be slow, Canadian grain exports continue to run ahead of last year’s pace.

Canada has exported 15.923 million tonnes of wheat so far in 2018-19, about two million tonnes ahead of the year-ago pace. Total barley exports, at 2.07 million tonnes, are about 300,000 tonnes ahead of 2017-18 exports at this time.

— Phil Franz-Warkentin writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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The government agency pegged canola supplies in the country at the end of March at 10.019 million tonnes, up by 10.5 per cent from the previous year, and up from the five-year average of 8.68 million tonnes.

Of that total, on-farm stocks of 8.838 million tonnes were also a new record for March 31, and well above the previous five-year average of 7.151 million.

Canadian barley stocks as of March 31 hit their lowest level in records going back to 1981, with only 2.488 million tonnes on hand in 2019. That compares with 3.39 million the previous year and the five-year average of 3.94 million tonnes.

Oat stocks were also tight, with 1.401 million tonnes in the country as of March 31, down by 33.4 per cent from 2018 and well below the five-year average of 1.914 million tonnes.

All-wheat stocks of 15.694 million tonnes were down by 4.3 per cent from the previous year and the tightest since 2016. Of that total, durum stocks of 3.915 million tonnes were up by 18 per cent on the year and up from the five-year average of 3.327 million tonnes.

Pea and lentil stocks were both down slightly from their year-ago levels, at 1.401 million and 1.363 million tonnes respectively.

— Phil Franz-Warkentin writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

Table: Statistics Canada stocks of field crops as of March 31, 2019, in millions of tonnes.

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Canadian canola exports to China are effectively non-existent right now, with the absence of that major customer casting a bearish tone on canola.

“The trend is sideways at best, and probably drifting a little lower,” said David Derwin of PI Financial, adding that the canola market was bearish even before the diplomatic dispute with China.

While a resolution to the trade dispute would be supportive, Derwin said values may not see much of a boost given the large old-crop supply situation.

“Putting the China issues aside, the canola market was bearish anyway,” said Mike Jubinville of MarketsFarm Pro, pointing to South American harvest pressure, large U.S. soybean supplies, and burdensome old-crop canola stocks.

With the negative news already factored into the market, Jubinville said canola had reached a point of consolidation.

Knee-jerk panic selling from farmers has exhausted itself, and producers are now locking up their bins. Meanwhile, speculators are already holding a large net short position. “So who’s left to sell?” asked Jubinville.

Beyond Canada’s trade uncertainty with China, market participants are also following trade talks between the U.S. and China. A deal between those two countries would help soybeans, which could provide some spillover support for canola.

The possibility of increased demand from other bargain-hunting customers could also provide support.

“Will we unlock demand from some other locations as prices get lower?” asked Jon Driedger, of FarmLink Marketing Solutions.

Looking to the new crop, most analysts expect canola acres will be down from earlier forecasts as farmers reconsider their options.

Driedger expected farmers would stick to their rotations, as “not that many alternatives that look great.”

Derwin and Jubinville agreed farmers were unlikely to deviate too much from their rotations.

“We’ll lose some acres this year, but I still think canola stacks up reasonably well relative to other options,” said Jubinville.

— Phil Franz-Warkentin writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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