Canola Intentions Surprise to the Downside

Heading into Tuesday’s Statistics Canada acreage report it was largely expected canola might lose some acres this spring despite record high old-crop prices. 

And lose it did. 

The report pegged intended new-crop canola planted area at 20.89 million acres. That is a hefty 7% drop from the 22.48 million acres planted a year earlier and falls well below pre-report trade estimates that ranged from 21.6 million to 22.75 million acres. 

If accurate – and unless new-crop yields blow the doors off – it sets another tight supply year for the 2022-23 marketing year. It also means the market absolutely cannot afford another drought like the one in 2021 that slashed production by about one-third and is projected to reduce 2022-23 carryin stocks to a mere 400,000 tonnes, down more than four-fold from a year earlier. 

In short, intended 2022 canola planted area leaves little margin for error, if any at all. 

In its report, StatsCan attributed the projected decline in canola planted area to strong prices for alternative crops, such as cereals. Skyrocketing input expenses, particularly for fertilizer, likely played a role in cooling grower enthusiasm for canola as well. 

In Saskatchewan, the largest canola-producing province, producers reported they anticipate seeding nearly 1 million fewer acres of canola, a drop of 8% to 11.14 million acres in 2022 compared with 2021. 

Farmers in Alberta are expected to plant 6.25 million acres of canola, down 6.9% from a year earlier, while those in Manitoba reported canola intentions of 3.31 million acres, down nearly 4%. 

The March 2022 Field Crop Survey, which collects information on crop planting intentions, was conducted from March 1 to March 29, 2022, and included about 11,500 farmers. Respondents were asked to report their planting intentions for grain, oilseeds and special crops. Subsequent surveys during the year will provide estimates of actual seeded acreage.