Ag Canada Hacks 2023-24 Canola Ending Stocks; Wheat Slightly Lower

Amid a tighter carryin from the 2022-23 marketing year and a smaller crop this year, Agriculture Canada has slashed its 2023-24 canola ending stocks estimate from last month. 

In updated monthly supply-demand estimates released late Monday afternoon, Ag Canada pegged canola ending stocks for the current marketing year at 1 million tonnes, down 700,000 from the August projection and nearly 500,000 below the previous year. In fact, if accurate, it would be the tightest canola ending stocks since the 2012-13 drought year when end-of-year inventories dwindled to just 588,000 tonnes. 

Today’s supply-demand update reflects Statistics Canada’s Sept. 8 stocks report, which estimated total national canola stocks as of July 31 – the end of the 2022-23 crop year – at 1.506 million tonnes, about 200,000 tonnes below Ag Canada’s August projection. The update also incorporates StatsCan’s Sept. 14 crop production report, which put this year’s canola crop at 17.36 million tonnes, compared to last month’s estimate of 18.8 million tonnes. 

Combined, the smaller old-crop carryin and production now puts the 2023-24 total canola supply at 18.97 million tonnes, versus 20.65 million in August and 20.14 million a year earlier. 

Even with the tighter total supply, Ag Canada raised its 2023-24 crush estimate by 300,000 tonnes from last month to 10 million. However, it also hacked its export forecast by 1.3 million tonnes to just 7.7 million, down from 7.94 million in 2022-23. 

In its accompanying commentary, Ag Canada blamed the smaller export forecast on pressure from tight Canadian stocks and large world supplies. “The strength of Chinese import demand remains the largest source of uncertainty in the export forecast as historically, imports have fluctuated significantly from one year to the next,” Ag Canada added. 

The bottom line was a much tighter 2023-24 ending stocks forecast – down 34% on the year and 60% below the five-year average - with the average expected price raised to $815/tonne from $790 in August but still down from the 2022-23 average of $857. 

For wheat, Ag Canada also reduced its 2023-24 export forecast, down to 21.3 million tonnes from 23.8 million in August and 25.53 million a year earlier. 

The fall is due to the Sept. 14 crop production report, which cut 2023 Canadian all wheat output to 29.83 million from 33.2 million in August and 34.33 million the previous year. 

In addition to cutting exports, Ag Canada also reduced expected domestic use to 8.64 million tonnes from 9.07 million last month, putting projected 2023-24 all wheat ending stocks at 3.6 million tonnes, down just 100,000 from last month and still slightly above 3.58 million a year earlier. 

Projected durum exports were cut 700,000 tonnes from last month alone to 3.3 million (versus 5.13 million in 2022-23), as production was lowered by almost 900,000 tonnes to 4.05 million. With the export cut and a larger carryin from 2022-23 durum ending stocks to offset the smaller crop, durum ending stocks for 2023-24 were left unchanged from last month at 400,000 tonnes, little changed from 397,000 a year earlier.