Bullish USDA Report for Canola

The canola market gained even more momentum following news that U.S. farmers intend to seed fewer soybeans.

The U.S. Department of Agriculture prospective plantings report issued an estimate of 73.9 million acres. That's one per cent lower than last year and nearly 1.5 million acres below what many analysts had anticipated.

Union Securities options broker and analyst Ken Ball believes this opens the door for western Canadian canola area to exceed 20 million acres.

"22 or 23 (million acres) is not going to shock me. What is going on out there right now is almost startling. Everybody is trying to squeeze in another 60 acres here or 100 acres there."

Ball knows of farmers planning to seed canola on canola for the first time ever---something that's not agronomically recommended due to disease concerns.

"Canola is just a shining star. There isn't another price that can even approach it. The acres are going to be huge. I don't know exactly how big, but they are certainly going to be big enough to support a 16 to 17 million tonne crop under reasonably good (weather) conditions."

The USDA report also estimates corn area will be four per cent higher than last year at 95.9 million acres. That would be the largest amount of corn planted since 1937.