According to Statistics Canada, farmers in the Great White North harvested a record canola crop this year.
To repeat: Record. Canadian. Canola. Crop.
The market was expecting to see 20.2 million tonnes of canola, which would’ve been a solid upgrade from the 19.7 million tonne satellite & data-based estimate in September.
Before that, the August estimate was 18.2 million tonnes. Mind you, this is surveyed during the growing season so, this upgrade is a reminder to gauge expectations appropriately.
From a yield standpoint, an average of 41 bushels per acre was harvested by the Canadian farmer. That’s a 10% improvement from the five-year average, although it didn’t top last year’s 43.1 bushel per acreage mean.
When you combine that with the record of more than 22.8 million acres harvested, you get a record crop of 21.3 million tonnes.
This is nothing short of impressive, considering the tougher-than-usual growing season that most farmers had.
So the market tanked right?
Nope. It tested some lines of support before rebounding. Basically, even the though the market was only expecting the report to show 20.2 million tonnes, the bears barely blinked with a crop that was 1.1 million tonnes higher showed up.
So what now?
Well, we continue to monitor demand. The market is likely going to take at least 20.5 million tonnes out of this supply. Potentially it could be as high as 21.5 million tonnes.
What we know is that the likelihood that Canadian canola ending stocks for 2017/18 drop below 1 million tonnes is a lot harder now.
For price direction now, we’ll be specifically watching
- Domestic crush demand,
- Exports, and
- South American weather.
Canadian farmers reported producing 21.3 million tonnes of canola in 2017, up 8.7% from 19.6 million tonnes
in 2016. This was the result of a record high harvested area of 22.9 million acres, up 14.1% from 2016.
However, farmers reported a 4.9% decrease in average yield to 41.0 bushels per acre, down from the record high set in 2016.
Saskatchewan farmers reported a 4.7% increase in canola production from 2016 to a record high 11.2 million
tonnes in 2017, the result of a record harvested area of 12.7 million acres (+14.2%). However, average yield
fell 8.3% to 38.9 bushels per acre.
In Alberta, farmers reported a 10.9% increase in canola production from 2016 to 6.8 million tonnes. This was the result of a 17.8% rise in harvested acreage, as average yield fell 5.8% to 43.7 bushels per acre in 2017.
Manitoba farmers reported that canola production rose 20.7% to a record high 3.1 million tonnes. This was the
result of a record