Ag Canada Forecasts Fewer Canola Acres in 2022; More Wheat

Canadian producers will plant less canola and barley but more wheat and oats in 2022, according to preliminary new-crop supply-demand estimates released by Agriculture Canada on Friday.

Ag Canada sees canola planted area for this spring at 21.74 million acres, down about 3.2% from a year earlier. At 8.15 million acres, new-crop barley area is projected down about 2% from the 12-year high achieved in 2021.

On the other hand, all wheat area planted area is anticipated to climb 5.8% to 24.82 million acres, with durum up roughly 9.5% to 6.05 million and wheat (excl durum) rising 4.7% to 18.77 million. (Total winter wheat area is seen up 1% to 1.35 million acres and spring wheat seeded area up 6% to 17.42 million). Oat planted area for 2022 is estimated at 3.7 million acres, an increase of 8.3%.

Ag Canada attributed the projected decline in canola acres to a shift into alternative cereals, while tight old-crop supplies, robust demand and high spot prices are expected to prevent the 2022 barley area from shrinking “too much,” despite strong competition for acres from other crops. For durum, wheat and oats, new-crop planted area is expected to be supported by strong pricing, and tight carry-in stocks.

The government forecast assumes a return to more typical growing weather and average yields in 2022 after last year’s drought-related disaster. Canola output, for example, is forecast to rebound by 60% to 20.2 million tonnes, the third highest on record. However, new-crop canola ending stocks are nonetheless projected to remain relatively tight, increasing just 200,000 tonnes to 700,000. Canola prices are forecast to decline sharply in 2022-23, falling 33% from the record highs in 2021-22 to $800/tonne (track Vancouver) – but still the second highest on record.

For durum, 2022 production is expected to increase to 5.5 million tonnes (up from 2.65 million in 2021), in line with the last five-year average. Ending stocks are expected to rise to 750,000 tonnes, up 67% from a year earlier, while the average price drops to $400/tonne from $700 (avg SK producer spot price). Wheat (exl durum) output is forecast 35% higher at 25.6 million tonnes, while ending stocks are seen increasing 1 million tonnes to 4 million. The average price, at $350/tonne (avg SK producer spot price), is projected down $60.

Barley production is expected to increase by 52% to 10.59 million tonnes, with ending stocks more than tripling to 1 million tonnes. The season average 2022-23 barley price is pegged at $310 (I/S Lethbridge) down from $420 in 2021-22.

Total oat production projected to increase by 67% to 4.36 million tonnes, while ending stocks climb 300,000 tonnes from the 2021-22 forecast to 500,000. At $400/tonne (CBOT nearby futures), the average price is seen falling $150 from the current marketing year.

Dry pea area is forecast to marginally to just over 4 million acres, while production rebounds 68% to 3.8 million tonnes. New-crop ending stocks are forecast at 150,000, up from 50,000 fror 2021-22. The average price is pegged at $450 (producer price FOB plant), down from $610. Lentil area is seen up 3% to 4.4 million acres with production rising 56% to 2.5 million tonnes. New-crop ending stocks are expected to double to 100,000 tonnes, while the average price drops to $725/tonne from $1,080 for the current year.