Canada Markets

As seen on the attached chart, the USDA's forecasts for global rapeseed/canola production found in the release of the September Oilseeds: World Markets and Trade report is bearish for 2022-23 and stands out from previous years. At the same time, Statistics Canada is poised to update their model-based estimates on Sept. 14 and it remains early to chisel anything into stone.

As seen on the attached chart, global production is estimated at a record 83.144 million metric tons in 2022, up 9.278 mmt or 12.6% from 2021-22. This volume is just more than 10 mmt higher than the five-year average. Of this increase in production, the European union is forecast to increase production by 955,000 mt from 2021-22, while a year-over-year increase of 2.124 mmt is reported in the "Other" producing nations category. This forecast may involve more difficult estimates of smaller producing nations; a look at USDA tables shows a 1.125-mmt increase for Russia, a 62,000 mt drop for Australia and a 90,000 mt increase for Pakistan, just to name some of the larger changes that will take place in this category.

As expected, the largest change in global production is seen for Canada, with the USDA estimating production to increase by 6.243 mmt year-over-year to 20 mmt, accounting for two-thirds of the global change. This is higher than the 19.5 mmt estimated by Statistics Canada based on July model data, while a Sept. 14 report is expected to result in a lower revision for canola, based on August model data.

Given the current USDA forecast, global production is set to exceed consumption by 3.299 mmt, as seen by the blue bar higher than the brown bar for the current crop year. This is the widest spread seen in five years, while would be the second-highest volume where production exceeded consumption. USDA data would suggest that production has exceeded consumption by an average of 519,200 mt during the past five years.

The black line with markers represents the global stocks, plotted against the secondary vertical axis, which are forecast to rise by 2.382 mmt to 7.239 mmt, the first year-over-year increase in four years and the highest in three years while 190,000 mt below the five-year average.

In addition to this weeks' Statistics Canada numbers, market watchers will be looking for signs of Chinese demand. The USDA's front-page story is the forecast rebound in China's recovery in imports, while the USDA is currently forecasting China's import of seed to increase 1 mmt and the increase of canola oil to increase by 1.270 mmt.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Follow him on Twitter @Cliff Jamieson

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