Canola prices rose in Canada despite large early-season stocks

Statistics Canada (StatCan) yesterday released its 2023/24 end-of-year stocks report, according to which, as of early August, the country's canola stocks reached a 4-year high of 3.1 million tonnes, a 67% increase from the previous season. However, the market reacted to this quite unexpectedly, and the quotations rose by 2.5%.

 

A new season began in Canada on August 1, but canola harvest rates remain quite low. Thus, as of September 3, in the province of Saskatchewan, canola has been threshed on only 16% of the area, and in Alberta - on 4.9% of the area. Rains predicted for the coming days will further delay harvesting, which has already led to a slight increase in quotations.

 

November canola futures on the Winnipeg exchange rose 2.5% to CAD 584/t or $430.5/t yesterday (-5.3% for the week, 0% for the month) after falling last week against the backdrop of a drop in oil prices by 8.5%.

 

Canadian canola stocks are rising as exports to the EU in FY 2023/24 have been weak and supplies to China may be limited as the government launches an anti-dumping investigation.

 

It will be recalled that last week China, which is the world's largest importer of canola, announced an inspection of supplies from Canada in response to the tariffs introduced by the Trudeau government on the import of Chinese electric cars and aluminum. Canadian canola exports are therefore at risk as Beijing may also introduce some restrictive measures.