Early understanding of Canadian canola crop damage
Following James’ article yesterday, we will now look at the Canadian crop situation in more detail.
Last week’s USDA Global Waste Supply and Demand (WASDE) report highlighted wheat decline. However, this August update provides a foregone conclusion about the strengthening of OSR stocks and the decline in Canadian canola crops.
This North American drought supports global values and therefore our domestic values.
Last week (November 21, 2011) it reached £ 485.00 / t, the highest of this trading year.
Although recent high prices have contributed to the decline. According to a new USDA report, global production reductions (-4.2Mt) exceeded global consumption reductions (-2.9Mt) per month.
OSR global stock use ratios (stock / household consumption) have dropped from 7.6% to 6.4% over the past month. This is the strongest stock since 2016/17, when shares were up 7.3%.
According to Statistics Canada production data by August 30, this means that WASDE was the first awareness of the effects of the drought.
The Canadian crop improved at 4.2Mt per month and now yields at 16m. This figure is based on the low harvest (-300Kha, per month) harvest and now up from 2.24t / ha in July and improved by 1.84t / ha in August.
While drought is affecting most Canadian canola crops, it is not surprising that this is the lowest production since 2012 compared to USADN Canada.
Export forecasts have fallen sharply, to 6.9Mt for the 2021/22 trading year, the lowest since 2007/08.
Interestingly, Canadian exports accounted for 49.4% of global OSR exports, averaging about 65% of global exports.
Is OSR growing for the 2022 harvest?
Farmers are tempted to raise OSR for the 2022 harvest, when prices are currently high and Paris’s future (November 21) closed at 490.39 / t yesterday.
However, it is important to look at the futures market due to the sharp fall of £ 405.28 / t yesterday. Although Canada’s crop is short for 2021/22, there is nothing to stop big growth for 2022/23, which is holding back future values.
If prices appear to be economically viable for OSR by 2022, it would be wise to use them now, as stated in yesterday’s grain market daily.