Agriculture Canada has sharply raised its old- and new-crop canola ending stocks forecasts amid a hefty downgrade in expected exports.
In updated monthly supply-demand estimates released Tuesday, Ag Canada projected 2023-24 canola ending stocks up 550,000 tonnes from last month to 2.55 million. That is up more than 1 million tonnes from the previous year, although still near the five-year average.
Meanwhile, 2024-25 canola ending stocks are now forecast at 2.5 million tonnes, compared to 1.65 million in April.
Today’s supply-demand outlook reflects Statistics Canada’s May 7 grain stocks report, which pegged national canola stockpiles as of March 31 at 8.263 million tonnes, a 17.5% increase over a year earlier and the highest for that date since 2020, at 10.859 million.
The upward revision in the old-crop canola ending stocks is due to a 1-million tonne reduction in the export forecast from last month to 6 million – well down from 7.95 million in 2022-23.
At least some of the drop in the export forecast was offset by a 200,000-tonne increase in the projected crush, to 10.7 million tonnes versus 9.96 million a year earlier. Feed, waste, and dockage was also bumped higher from last month to 783,000 tonnes from 533,000.
In its accompanying commentary, Ag Canada said the export forecast was lowered in response to growing domestic crush and competition from large world supplies of soybeans and palm oil.
“Exports are concentrated in a few key markets with China accounting for almost two-thirds of out-of-Canada shipments to the end of February, followed distantly
by Japan and Mexico at 16% and 8%, respectively.”
As of May 12, canola exports were lagging the year-ago pace by 26% and were 28% behind the five-year average pace.
For 2024-25, Ag Canada lowered its export forecast to 6.9 million tonnes from 7.7 million in April, while the crush was increased to 11 million tonnes from 10.5 million.
Ag Canada described its new-crop canola crush forecast as “conservative,” suggesting it may be revised higher depending on how fast new Prairie crush plants currently under construction become operational.
Meanwhile, new-crop exports are expected to be “highly sensitive” to the size of the domestic canola crop, the strength of domestic crush demand, and competition from world supplies of oilseeds and vegetable oils.
Despite this month’s large revisions in old- and new-crop ending stocks, Ag Canada held its 2023-24 canola price forecast unchanged from April at $705/tonne, with the expected 2024-25 price also steady at $675.
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