Canola Production Likely to Rebound in 2022 but Stocks to Remain Tight

Canadian canola production should rebound strongly in 2022 – provided the weather cooperates – but ending stocks will remain relatively tight, according to projections presented last week at the Saskatchewan Crop Organizations annual general meeting.

In her own new-crop supply-demand scenario for 2022-23, Marlene Boersch of Mercantile Consulting Venture had national canola planted area rising 5-7% on the year to about 22 million acres. Assuming a return to normal weather and average yields following last year’s drought disaster, she estimated production will rebound to near 21 million tonnes – an increase of about 8.4 million or 66% from the 2021 crop, which StatsCan pegged at 12.6 million tonnes in December.

With total expected new-crop canola demand rising to an estimated 19.8 million tonnes (from 14 million for the current marketing year), Boersch pegged 2022-23 canola ending stocks at 1.57 million tonnes. That represents a sharp increase from the 500,000 tonnes now being forecast by Agriculture Canada for the 2021-22 marketing year but still down from 1.76 million in 2020-21 and on the low side of normal.

“That would still leave us relatively tight. . . but it will all depend on yields,” she said.

As part of her presentation, Boersch suggested old-crop canola exports – based on the pace of shipments to date - will likely only amount to 4.7 million to 4.8 million tonnes, below the latest Ag Canada forecast of 5.4 million. However, she also indicated the 2021-22 domestic crush will probably exceed the Ag Canada forecast of 8.5 million tonnes, perhaps reaching 9 million tonnes.

Looking ahead to 2022-23, she said exports should return to a more typical level around 10 million tonnes, while the crush rebounds to about 9.5 million.

Boersch also said it is likely that old-crop canola ending stocks fall slightly below the Ag Canada estimate of 500,000 tonnes, meaning an even smaller carryin to the 2022-23 marketing year.