MarketsFarm — Statistics Canada on Wednesday released its first survey-based seeding intentions report for the 2023-24 marketing year, reporting an anticipated 0.9 per cent rise in canola acres, to 21.6 million.
The figure occupied the lower end of trade expectations, but StatCan recently adopted a new methodology of conducting the survey last December and January, two months earlier than in previous reports.
At least one analyst is thinking there will be even more canola acres planted this spring.
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“Fertilizer prices dropped considerably between December and April,” Jerry Klassen of Winnipeg-based Resilient Commodity Analysis said. “The trade thinks this canola number is on the low side, maybe by 500,000 (to one million) acres. I think we’re going to see an increase on the next report.”
The July canola contract lost $17.30 per tonne for the week ended Wednesday, to $734.90, while the November canola contract gave up $13/tonne, to $703.30. This is despite funds exiting short positions before the expiry of the May contract.
“I think the managed money is still doing some short-covering here. I think the market has limited resistance because farmers aren’t typically active sellers at this time,” Klassen said.
He also cited increasing commercial demand and the potential for adverse weather in Western Canada as other factors supporting canola prices.
“Once you get into the second week of May, you get a bearish scenario once the weather starts to co-operate and seasonally, once you get past the Victoria Day long weekend, canola has a large bearish tendency,” Klassen said.
“Over the next couple of weeks, you have a firmer tone. But in the longer term, you’re going to get this crop seeded and it’s getting off to a good start. The weather is going to be cool and wet.
“You’re probably going to see record canola yields this year.”
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.
