Ag Canada Tightens Old-, New-Crop Canola Stocks Estimates; Cuts Price Outlook

Agriculture Canada has tightened its old- and new-crop canola ending stocks estimates from last month, while also lowering its price expectations. 

In updated monthly supply-demand estimates released late Tuesday afternoon, Ag Canada pegged 2022-23 canola ending stocks at 650,000 tonnes, down sharply from the April estimate of 1 million, and even below the drought-impacted 2021-22 ending stocks level of 865,000 tonnes. With the smaller old-crop carryover and a slight reduction in this year’s production estimate, 2023-24 ending stocks are now seen at 600,000 tonnes, versus the April forecast of 1.05 million. 

If accurate, ending stocks for both the old- and new-crop marketing years would fall far below the five-year average of 2.2 million tonnes. 

Meanwhile, despite tighter ending stocks estimates for both years, Ag Canada estimated the 2022-23 season average canola price at $805/tonne (No. 1, track Vancouver) down $45 from the April estimate and $270 below the previous year. The reduction in the new-crop price forecast was even starker, dropping $120 from last month to $700 and below the five-year average of $718. 

This month’s supply-demand estimates reflect Statistics Canada’s April 26 acreage report, as well as its May 9 grain stocks report.  

The acreage report projected 2024 Canadian canola planted area at 21.59 million acres, slightly below Ag Canada’s prior forecast of 21.74 million. With the reduction in seeded area, and a corresponding drop in harvested area, Ag Canada now estimates the 2024 canola crop at 18.4 million tonnes, down 100,000 from the April forecast. Meanwhile, the May stocks report showed total national canola stockpiles as of March 31 at 5.94 million tonnes, up 15.3% from the same time last year but down from the March 31, 2021 level of 7.81 million. 

Ag Canada made no changes to its 2022-23 canola export and crush forecasts from April, holding them at 8.4 million and 9.5 million tonnes, respectively. Instead, the government department pulled back its ending stocks estimate based on much higher estimate of feed, waste, and dockage, increasing it to 537,000 tonnes, compared to just 187,000 in April but still below 900,000 in 2021-22. For 2023-24, Ag Canada forecast feed, waste, and dockage at 199,000 tonnes, what it described as a more typical level.