A trader with Bunge Ltd says Canadian farmers will likely plant a record number of canola acres this spring.
Nicholas Hoyt told those in attendance at GrainWorld that we could see 19.5 million acres of canola planted, with up to 20.5 million if weather conditions are ideal.
"Right now, I have to imagine that farmers are planting as much canola as possible," says Hoyt. "I would say right now on a supply-and-demand basis that the flat price at the moment is very rich if they plant 20 million acres and you come out with 15 million tonnes of production."
"It comes back to how much China imports, if they take 3 to 3.5 million tonnes of seed versus if they take 1.78 again, you're talking about a carry-out that's going to feel comfortable everywhere," he says.
Hoyt says the market has already started adjusting to the large acreage expectations.
"We were up at 630 two weeks ago, we've come down eight, nine percent in just a few trading sessions," he says. "When we get very expensive people ask themselves which balance sheet might have the most room, and if you expect that we're going to put that type of seed in the ground, then the canola story isn't as tight or as dire as it was three or four months ago."
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