Canadian Canola Supplies Remain Tight, Chinese Demand Expected To Recover Strongly

Canadian Agricultural Markets analyst Mike Jubbingwell said based on his conversations with farmers,

Canadian canola production could be closer to 18.7 million tonnes this year, down from Statistics Canada's forecast of 19.1 million tonnes, given carryover stocks. Very low, so rapeseed supplies are tight.

Jubingwell said more than one good year would be needed to achieve the goal of rebuilding the rapeseed supply.

His company is projecting a 2022/23 Canadian canola crush of 9.5 million tonnes, but it could be higher because canola crushing is now particularly profitable, exceeding C$200 a tonne. Agriculture and Agri-Food Canada is projecting a canola crush of 10 million tonnes, up from 8.6 million in 2021/22.

Jubinwell said he would wait for canola prices to break above the current trading range before selling more canola. The January canola contract appears to be stable at C$860-880 a tonne, he said in a webinar last Thursday. His company, which already sells 30 percent of its spot rapeseed, is looking for opportunities to sell more supply.

International vegetable oil prices fell sharply in June this year, but started to rebound in October. Soybean oil prices have recovered to 73 cents a pound from around 56 cents in July on strong global demand for soybean oil.