July 31 Canola Stocks Down Hard, but Still Heavier than Expected

Canola ending stocks for the 2021-22 crop year may be estimated at their lowest level in nine years, but they are still well above previous expectations. 

In the wake of the 2021 Prairie drought that slashed production by nearly one-third, a Statistics Canada grain stocks report on Wednesday pegged total nationwide canola stockpiles as of July 31 (ending stocks for the 2021-22 crop year) at 874,600 tonnes, down almost 51% from a year earlier and the lowest since July 31, 2013.  

However, today’s stocks estimate is still up from Agriculture Canada’s August supply-demand estimate of 800,000 tonnes – which was double the government’s projection as recently as July. Although last year’s drought did severely dent canola output, the 2021 production estimate has ticked higher from previous estimates in recent weeks, also pushing ending stocks higher. In last month’s crop production report, StatsCan revised the 2021 canola crop up to 13.75 million tonnes from 12.59 million. 

Regardless, the higher 2021-22 ending stocks estimate, combined with a much larger Prairie canola crop in 2022, means total supplies for the 2022-23 crop year will be much more comfortable than a year ago, potentially at more than 20.3 million tonnes. 

This past year, tight supplies limited both deliveries of canola (-29.1% to 14.3 million tonnes) and total domestic disappearance (-11.1% to 9.5 million tonnes). Moreover, 2021-22 canola exports were less than half of what they were one year earlier, decreasing 50.3% to 5.3 million tonnes, the lowest since 2005. 

The year-over-year decline in July 31, 2022 canola stocks was mainly due to lower on-farm stocks, which plummeted 77.4% from a year earlier to 242 000 tonnes. Commercial stocks were down much less severely, falling 10.1% to 632 600 tonnes. 

July 1 on-farm canola stocks in the No. 1 production province of Saskatchewan fell to just 140,000 tonnes, down 42% from a year earlier and the lowest since just 100,000 tonnes in 2013. At only 62,000 tonnes, on-farm stocks in Alberta were down more than 11-fold from 695,000 a year earlier and the lowest since 55,000 tonnes in 2012.