With a much smaller-than-expected crop, the 2024-25 canola balance sheet has tightened considerably.
Agriculture Canada’s monthly supply-demand update on Thursday pegged canola ending stocks for the current marketing year at just 1.25 million tonnes. That is down from 2.2 million in November and less than half the previous year’s 2.748 million. If accurate, it would also represent the tightest canola ending stocks since the 2012-13 crop year at just 588,000, even falling below the 2021-22 drought year ending stocks of 1.484 million.
Today’s supply-demand update reflects Statistics Canada’s Dec. 5 crop production report which estimated the 2024 Canadian canola crop at 17.845 million tonnes, more than 1 million below the agency’s previous estimate in September of 18.981 million.
With the smaller crop, Ag Canada revised down the 2024-25 total canola supply to 20.692 million tonnes from 21.828 million in November and 21.325 million a year earlier. However, the demand side of the balance sheet was relatively unchanged from last month, with projected exports and the expected crush maintained at 7.5 million and 11.5 million tonnes, respectively.
Ag Canada did revise feed, waste and dockage slightly lower from last month – down to 391,000 tonnes from 577,000 – but the impact of the smaller crop was otherwise mainly reflected in the tighter ending stocks estimate.
Despite a tighter supply, Ag Canada lowered its 2024-25 average canola price forecast to $615/tonne, down $45 from November and a whopping $100 below the previous year.
The lower price forecast likely at least partially reflects a glutted global soybean market, especially with a record-large Brazilian crop on the way.
Further uncertainty in the canola outlook is fueled by an ongoing anti-dumping investigation by China, and US President-elect Donald Trump’s tariff threats.
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