It seems that we are in an endless cycle of positive news for oilseed pricing. On Friday evening, it was the Indonesian decision to ban the export of palm (see here), now, it is the turn of Canada.
We have been keeping a close eye on Canada. At around this time, last year was the turning point when canola prices were rising off the back of poor conditions within Canada, it was dry, and it was turning hot. Earlier in the month, we wrote about how the subsoil moisture levels were not attractive (see here)
Statistics Canada released their numbers this week, and Canadian acreage is expected to drop considerably. Year on year, canola is expected to see a 7% drop to 8.45m ha. Interestingly this is only slightly lower than the 2011 to 2021 average, and 2010 was lower.
It does show that farmers are concerned about the dry conditions. The extremely high pricing levels have not been enough to take the punt on increased acres.
The second chart below shows the rainfall for Saskatchewan. At the end of April, rainfall has been lower than average. They will need a good May/June.
The third chart shows a selection of grains and the year on year change, and we can see that spring wheat, the main grown type, has taken on most of the acres, not going into canola.
Canada is a huge competitor to us, and when their crop goes through tough times, it can be beneficial to us. It’s worthwhile reading a piece I wrote last year about the value of Canada to the global supply chain (see here & here)