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Canola Production Likely to Rebound in 2022 but Stocks to Remain Tight

Canadian canola production should rebound strongly in 2022 – provided the weather cooperates – but ending stocks will remain relatively tight, according to projections presented last week at the Saskatchewan Crop Organizations annual general meeting.

In her own new-crop supply-demand scenario for 2022-23, Marlene Boersch of Mercantile Consulting Venture had national canola planted area rising 5-7% on the year to about 22 million acres. Assuming a return to normal weather and average yields following last year’s drought disaster, she estimated production will rebound to near 21 million tonnes – an increase of about 8.4 million or 66% from the 2021 crop, which StatsCan pegged at 12.6 million tonnes in December.

With total expected new-crop canola demand rising to an estimated 19.8 million tonnes (from 14 million for the current marketing year), Boersch pegged 2022-23 canola ending stocks at 1.57 million tonnes. That represents a sharp increase from the 500,000 tonnes now being forecast by Agriculture Canada for the 2021-22 marketing year but still down from 1.76 million in 2020-21 and on the low side of normal.

“That would still leave us relatively tight. . . but it will all depend on yields,” she said.

As part of her presentation, Boersch suggested old-crop canola exports – based on the pace of shipments to date - will likely only amount to 4.7 million to 4.8 million tonnes, below the latest Ag Canada forecast of 5.4 million. However, she also indicated the 2021-22 domestic crush will probably exceed the Ag Canada forecast of 8.5 million tonnes, perhaps reaching 9 million tonnes.

Looking ahead to 2022-23, she said exports should return to a more typical level around 10 million tonnes, while the crush rebounds to about 9.5 million.

Boersch also said it is likely that old-crop canola ending stocks fall slightly below the Ag Canada estimate of 500,000 tonnes, meaning an even smaller carryin to the 2022-23 marketing year.

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Dr. Veronique Barthet, research scientist and program manager in the Grain Research Laboratory at the Canadian Grain Commission, discusses the grain quality from harvest 2021. Dr. Barthet presented on Nov. 30, during the Canola Industry Meeting, day one of Canola Week.