Market Morsel: Canada dry a cause for canola concern?

Grain | 21st March 2024 | By Andrew Whitelaw

The Snapshot

  • The northern hemisphere is waking up from winter.
  • The majority of the world’s crop is grown in the north.
  • Canada is dry in many parts.
  • According to the data, the major canola-growing region (Saskatchewan) seems to have had similar rainfall and soil moisture to recent years.
  • The canola price has seen some upward movement, and against a falling wheat price, it has become more attractive to plant.

The Detail

We are starting to move out of the northern hemisphere winter, and that is when the market starts to really wake up. The majority of the world’s crops are grown in the northern hemisphere, and what happens in those regions is going to be the driver of pricing for the coming year.

I wanted to have a look at Canada, and specifically canola. The chart below shows the percentage of each major Canadian crop and how much of it is grown in Saskatchewan.

Over the past five years, 53% of the country’s canola has been grown in this province, and therefore they are the most important region for growing.

The importance of Saskatchewan as a canola producer is why the rest of the weather charts will be for this province and not the others, although those can be provided upon request.

The first chart below shows the rainfall seasonality for Saskatchewan up until the current day. Overall the rainfall has been as per normal. There isn’t a huge amount of rainfall during the latter and early months of the year.

It is really the middle months that are most important. The weather in April and May is what will make or break the crop.

The second chart shows the soil moisture for the same area up until the end of February. The soil moisture has been low, but is at similar levels to recent years.

In a fortnight, we will get access to the March update, but I expect soil moisture to continue to be low.


The canola production areas of Saskatchewan are on a knife edge and could quite easily turn into a poor production season.

The Canadian government releases drought maps, which show significant areas of the country in drought (see here).

The chart above shows the canola and wheat prices, as a monthly average, going back to the start of 2014.

The average ratio of canola to wheat, that is, how many times canola is worth compared to wheat, is 1.9. This ratio was as high as 2.65 in 2021 when the Canadian crop was in dire straits.

Currently, canola is at 1.93, a recovery from the past few months where it was well below average.

The increase, or really stabilisation of the canola price in recent times, along with the fall in the price of wheat, has assisted in making canola more attractive.

At the moment, we can’t say that the weather in Canada is a crisis and that we will see impacts the same as in 2021/2022, however, it is one to keep an eye on.