Canola prices rose 4.2% after the Canadian crop forecast was downgraded

Statistics Canada StatCan yesterday reduced the forecast for the canola harvest in the country in the 2024/25 FY by 0.5 million tons to 19 million tons (19.5 million tons forecast in August), which will be 1.1% lower than the 2023/24 FY and 5.2% - the USDA's September forecast (20 million tons). The canola yield estimate was cut by 0.8% to 38.4 bushels/acre, and the harvested area was cut by 0.4% to 21.8 million acres.

 

This led to a sharp increase in quotations, which compensated for Friday's decline.

 

In Saskatchewan, the canola harvest is expected to decrease by 0.4% to 10.3 million tonnes, Alberta – by 1.7% to 5.5 million tonnes, Manitoba – by 2.2% to 3.1 million tonnes.

 

November canola futures on the Winnipeg exchange rose 4.2% to CAD565/t or $415.6/t yesterday (-3.3% for the week, -1.2% for the month) amid rising prices for oil

 

They were also supported by the intensification of exports, which grew to 131.5 thousand tons in a week, and in general in 2024/25 MR reached 1.13 million tons, which is 2.5 times ahead of last year's pace.

 

Rape futures in the EU have not yet reacted to the decline in the harvest in Canada, although it remains the main supplier of rape to the EU, where it can deliver 1.5-2 million tons this season.

 

November canola futures on the Paris MATIF rose just 0.3% to €457.75/t or $509/t yesterday, after falling 2.1% on Friday amid lower canola prices.

 

Canola exports from Canada in FY2024/25 are estimated at 7 million tonnes, but lower production amid increased refining will continue to reduce exports as refiners offer better canola prices than exporters amid rising oil prices. Therefore, the EU needs to step up its purchases of canola in Canada to ensure the necessary processing volumes.