December 14 – Chinese Canola Imports Upgraded by USDA

The USDA thinks that China will import more canola again in 2017/18. But how much more?

The USDA thinks that Chinese canola imports will increase again in 2017/18. But how much more?

After admitting that canola production in Canada was bigger than expected, the USDA decided that they’d also upgrade the export side of the equation for the balance sheet.

Specifically, the USDA thinks that the Canadian canola harvest was a record 21.5 million tonnes, slightly higher than Statistics Canada’s 21.3 million-estimate.

With more supply they increased Canadian canola exports by 500,000 tonnes to 11.5 million tonnes.

The good news is that they expect China to take a lot of that.

Chinese rapeseed imports were increased to 4.7 million tonnes. Their previous estimate was 4.3 million tonnes.

Last year in 2017/18, China also imported 4.3 million tonnes.

Thus, Chinese canola imports should be up nearly 10% year-over-year, most of which is going to be owned by Canada.

We’ll take the demand!

 

Global Rapeseed Supplies Eased by Record Harvest in Canada

Based on an official survey of farms in Canada, higher reported yields of canola revised the 2017/18 production estimate upward this month to 21.5 million metric
tons from 19.9 million last month. The crop expanded to an all-time high due to record area and realization of the second-highest yield ever. Compared to 2016/17,
canola yields were reduced in Saskatchewan and Alberta, where crops were stressed by high temperatures and below-average rainfall last summer. Additional Canadian supplies may expand 2017/18 exports by another 500,000 tons to 11.5 million.

Indian rapeseed production for 2017/18, however, is expected to decline to 6.5 million tons after last month’s forecast of 7.2 million. Rapeseed planting in November was deterred for northern India by warm and dry conditions. Farmers there have also been disappointed with the price of rapeseed. Indian rapeseed area is seen falling 700,000 hectares short of the previous forecast (and equaling the 2016/17 area of 6.5 million hectares).

China is the top import market for Canadian export shipments and will be the main beneficiary of the larger supply. China rapeseed imports for 2017/18 are expected to increase to 4.7 million tons, up 400,000 tons from last month and the 2016/17 total of 4.3 million.

H/T: USDA Oil Crops Outlook
About the Author
Brennan Turner

Brennan Turner is the CEO of FarmLead.com, North America’s Grain Marketplace. He holds a degree in economics from Yale University and spent time on Wall Street in commodity trade and analysis before starting FarmLead. In 2017, Brennan was named to Fast Company’s List of Most Creative People in Business and, in 2018, a Henry Crown Fellow. He is originally from Foam Lake, Saskatchewan where his family started farming the land nearly 100 years ago (and still do to this day!). Brennan's unique grain markets analysis can be found in everything from small-town print newspapers to large media outlets such as Bloomberg and Reuters.