Canada Markets

We have been concerned for quite some time that the canola market has failed in its primary function of discouraging demand and encouraging supply through price signals given the developments for both. The lack of slowing of the extraordinary pace of use confirmed our suspicions some time ago on the demand side with Friday's Statistics Canada Principal Field Crop Area report confirming it failed on the supply side as well. As such, end users will face tight supplies for another 14 months.

Not only did canola seeded area fall from last year -- to 21.457 million acres from 22.011 million acres -- but it also failed to even reach the March intentions that Agriculture and Agrifood Canada (AAFC) has been using in its new-crop supply and disposition analysis. Although it was only 188,800 acres below the intentions, when there wasn't enough to go around already, that doesn't help.

In its June update, AAFC had assumed a total production of 18 million metric tons (mmt) with the help of a slightly higher yield. Given the drought impacts early in the growing season, both yield and area look like they will likely be revised lower.

As it was, AAFC had assumed exports would have to fall to 6 mmt from the current 9 mmt estimate for 2024-25 due to a lack of supply. They also assumed crush would have to fall from 11.5 mmt to 11 mmt again due to supply constraints. So, taking out another 160,000 metric tons (mt) or so (based on the lower seeded area alone) won't help.

It's worth noting that AAFC is currently using a negative 959,000 mt Feed, Waste & Dockage (FWD) figure to try to make the 2024-25 supply and disposition work in order to leave a mere 1.15 mmt ending stocks level, assuming Statistics Canada will revise previous years' production higher, allowing for a larger beginning supply to correct the FWD use.

Barley area also fell from both 2024 levels and the March intentions report. At 6.136 million acres compared to 6.405 million acres last year and an intention estimate of 6.280 million acres, it marks the lowest seeded area since 2017 and the second lowest this century.

Producers rejected the March intentions report that had suggested an increase in spring wheat acres with final area falling from both the 2024 levels and the March intentions report. An estimated 18.809 million acres were seeded compared to 18.943 million acres last year and an intention estimate of 19.421 million acres.

On the other hand, durum wheat acres managed to increase from both the 2024 levels and the March intentions report. An estimated 6.532 million acres were seeded compared to 6.364 million acres last year and an intention estimate of 6.367 million acres.

The oat area came in fairly close to the March intentions report. An estimated 2.996 million acres were seeded compared to 2.900 million acres last year and an intention estimate of 2.978 million acres.

Corn (for grain) area also ended up fairly close to the March intentions report. An estimated 3.732 million acres were seeded compared to 3.651 million acres last year and an intention estimate of 3.769 million acres.

Pulses and specialty crops were favored by producers. Soybean area ended up at an estimated 5.737 million acres seeded compared to 5.710 million acres last year and an intention estimate of 5.635 million acres.

Lentil area was the big surprise with it hitting an estimated 4.380 million acres seeded compared to 4.210 million acres last year and an intention estimate of 4.175 million acres. Dry peas came in at an estimated 3.504 million acres seeded compared to 3.213 million acres last year and an intention estimate of 3.517 million acres. Chickpeas, canary seed and sunflowers all witnessed increased area compared to last year as well.

**

I welcome feedback along with any suggestions for future blogs. My daily comments can be found in Plains, Prairies Opening Comments and Plains, Prairies Quick Takes on DTN products.

Mitch Miller can be reached at mitchmiller.dtn@gmail.com

Follow him on social platform X @mgreymiller

(c) Copyright 2025 DTN, LLC. All rights reserved.