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Canola Output Down Hard with More Downside Ahead

Harvested area remains a wildcard, but already Canadian canola production is set to fall by almost one quarter this year.

In its first production estimates for the 2021 growing season on Monday, Statistics Canada pegged national canola output at 14.74 million tonnes, down 24.3% from a year earlier and potentially the smallest crop since 13.86 million in 2012. Pre-report trade estimates had the crop anywhere between 11.5 million and 16 million tonnes, while last week’s monthly supply-demand update from Agriculture Canada had the crop at 15 million.

At 29.2 bu/acre, the average expected canola yield is down from 41.8 bu a year ago, and is also poised to be the lowest since 2012 when farmers reaped just 27.9 bu.

Today’s StatsCan estimates are based on yield models using satellite imagery, which showed much lower-than-normal vegetation health due to severe drought and heat across much of Western Canada this summer. However, coarse resolution-based modelling relies on historical averages for harvested area. As such, StatsCan is projecting 2021 canola harvested area at 22.24 million acres, which represents almost 99% of this year’s planted area of 22.47 million – exactly in line with the previous year.

The impact of drought means a higher number of acres than usual have likely already been abandoned or cut for greenfeed, thus pushing production potential even lower. Indeed, the final canola harvested area won’t be known until StatsCan releases the results of its November field crop survey Dec. 3.

In the largest production province of Saskatchewan, this year’s canola crop is pegged at 7.37 million tonnes, down roughly one-third from the previous year’s 10.96 million and the smallest crop since 7.34 million in 2011. The average provincial yield, at 27 bu/acre, is down 36.8% from 42.7 bu last year and the lowest since 25.1 bu in 2012. Still, the Saskatchewan canola production estimate reflects a 6.3% increase in expected harvested area (12.03 million acres) compared to a year ago.

In Alberta, canola output is seen at 4.48 million tonnes, a drop of 14% from last year. Yields are projected to decrease almost 26% to 29.8 bu/acre, although harvested area – at least for now - is forecast to rise 16% to 6.63 million acres.

The average Manitoba canola yield is expected to fall14.5% to 35.4 bu/acre and harvested area up 0.1% to 3.4 million acres, resulting in a 14.4% production decrease to 2.73 million tonnes.

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