There will be a much heftier supply on hand than expected to cushion any potential shortfall with the 2020 Canadian canola crop.
In a grain stocks report released Friday morning, Statistics Canada pegged domestic canola stockpiles as of July 31 – ending stocks for the now closed 2019-20 marketing year – at 2.74 million tonnes. That represents a 34.4% decline from a year earlier but is still much higher than earlier industry ideas of around 2.1 million tonnes, based on the previous StatsCan production estimate for the 2019 crop.
As part of its 2020 crop production report released earlier this week, StatsCan revised its 2019 canola production estimate up by roughly 830,000 tonnes, to 19.47 million, thus suggesting the potential for a heavier 2019-20 ending stocks as well. In its report this morning, StatsCan also tinkered with its 2018-19 canola ending stocks estimate, raising it to 4.17 million tonnes from the previously reported 3.83 million.
In its August supply-demand update using the old 2019 production estimate, Agriculture Canada projected 2019-20 canola ending stocks at 1.825 million tonnes.
StatsCan estimated nationwide on-farm canola ending stocks as of July 31 at 1.4 million tonnes, a sharp 51.3% fall from a year earlier, while commercial stocks were up 7.6% to 1.3 million tonnes.
On-farm canola stocks declined as 2019-20 producer deliveries rose 10.8% to 20.7 million tonnes, StatsCan said. Deliveries were partially driven by strong domestic demand as Canada's canola crushing hit a record-high 10.1 million tonnes in 2020 - the result of high global demand for vegetable oils, combined with high canola supply and good crushing margins.
Meanwhile, despite ongoing tariffs on canola exports to China, one of Canada's largest export markets, total exports rose 10.5% year over year to 10.2 million tonnes. Exports increased to a number of countries, including several in the European Union, as well as the United Arab Emirates.
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