18 April 2012
Canada’s total oilseed production, which includes canola, soybeans, flax, and sunflower seed is set to expand further in 2012/13 to a forecasted 20.0 million metric tons (MMT). Increases in production are anticipated in all oilseeds crops - canola, soybeans, sunflower seed and flax. Total oilseeds production forecasted for 2012/2013 represents an increase of more than 6% over year 2011/2012 production levels and is being driven by attractive prices relative to other crops. Crush is also forecast to rise again in 2012/2013 to 8.2 MMT due to the larger crop and the increased domestic canola crush capacity that has been built up over the past 5 years. This represents a 2.5% increase over the previous year's levels. Total oilseed exports in 2012/2013 are forecasted at 11.4 MMT, a marginal decrease from year 2011/2012 expected levels. Despite the increased oilseed crop, exports in 2012/2013 will be limited due to lower supplies resulting from low carry-in stocks in canola, flax and sunflower seed. Low stocks are anticipated to keep total oilseed import levels unchanged in 2012/2013.
Canada's total oilseed production rebounded in 2010/2011 after 2009/10 crops were down primarily due to an unusually wet and cold summer that was not completely offset by an extended fall growing season. Total oilseed production reached 18.8 MMT, an increase of over 6% above 2009/2010 production levels. The increase was driven by increases in canola production which more than offset the slight decreases in soybean, flax, and sunflower seed production. On the trade front, Canada’s total oilseed exports are expected to rise in 2011/2012 due to the increased crop size. Total oilseeds exports are expected to reach 11.5 MMT, an 8% increase over 2010/2011 export levels. Crush is anticipated to rise to 8.0 MMT due to the increased crop size. Despite buying power buoyed by the stronger Canadian dollar, higher domestic availability is expected to pull total oilseed imports down to about 360,000 tons in 2011/2012.
Canada: Total Oilseeds
RAPESEED (CANOLA), OILSEED
Although the Statistics Canada seeding intentions were not available at the time of this report, strong prices and attractive yields are forecast to push canola production in 2012-2013 to record highs. Canola production is anticipated to reach 15.4 MMT, an increase of almost 9% above year 2011/2012 levels. Despite record production expected, exports in 2012/2013 are forecast to remain flat as exports will be limited by supplies. Canola supply is forecast not to rise significantly due to very low carry-in stocks. In 2011/2012, exports are expected to reach 8.4 MMT due to strong demand and high supplies. Domestic crush in 2012/2013 is forecast to increase 3% from 20122/2012 expected levels of 6.6 MMT. Domestic crush will be limited by tighter domestic supplies resulting from low carry-in stocks.
The Canadian biodiesel mandate came into force on July 1, 2011. The mandate requires 2% renewable fuel content in diesel fuel and heating oil. Canola is a good feedstock for biodiesel in Canada due to its performance in Canada's cold weather conditions. Much of the canola-based biodiesel used to meet the Canadian mandate is from canola that is exported to the United States, processed into biodiesel and then re-exported to Canada. Investment in increasing biodiesel plant capacity in Canada has been slow.
In the fall of 2011, the United States Environmental Protection Agency (EPA) approved the Government of Canada's petition to use the aggregate approach for approval of Canadian feedstocks, including canola, for biodiesel production in the United States. The decision provides secure access for Canadian canola as a sustainable feedstock for U.S. biodiesel markets under the Renewable Fuels Standards 2 (RSF2) regulations.
The Canadian government has been very active in its trade missions to Asia and has brought about several promising developments for the Canadian canola industry. In February 2012, a Memorandum of Understanding on a joint canola research between Canada and China was signed. The full re-opening of this market is important to Canadian canola growers. China had placed import restrictions on Canadian canola shipments due to concerns of a disease known as blackleg. The Canadian government was able to work out some transitional measure that would allow canola shipments that tested positive with black leg into a limited amount of facilities located in areas where Chinese rapeseed is not grown. Trade in Canadian canola exports to China in calendar year 2011 was 1.3 MMT, down more than 12% from the previous year. The Canadian canola industry was also pleased with the announcement of negotiations for a Canada-Japan Economic Partnership Agreement. Japan is one of the largest markets for Canada canola. Trade in Canadian canola exports to Japan in calendar year 2011 was 7.9 MMT, up nearly 6% from the previous year.
Canadian soybean production in 2012/2013 is expected to decrease marginally from year 2011/2012 levels due to a return to normal yields. Production is forecast at 4.2 MMT. Exports in 2012/2013 are forecast to remain strong due to steady demand. Domestic crush in 2012/2013 is expected to remain at levels similar to those expected for 2011/2012 due to limited supplies. This is still well above the 5-year average.
With canola and soybean crush forecast to continue to remain at high levels experience in 2011/2012, total meal production is forecast to increase to nearly 5.0 million metric tons (MMT). This is an increase of nearly 3% over year 2011/2012 expected levels, and is significantly above the 5 year average. This trend towards increased crush is reflective of the increased crush capacity that has been built up in Canada over the last 5 years. The increase in meal production forecasted for 2012/2013 is being driven by the increase in canola crush as the soybean crush is forecasted to remain at year 2011/2012 expected levels. Increased production and continued strong demand will fuel total meal exports in 2012/2013. Exports are forecast to increase in 2012/2013 to 3.4 MMT, almost 4% above year 2011/2012 expected levels. Meal imports in 2012/2013 are forecasted to remain at 2011/2012 levels due to ample domestic supplies.
Total oils production in 2012/2013 is expected to continue at the high pace being experienced in 2011/2012. Crush is up significantly from the 5 year average due to the increased crush capacity that has been built up in Canada over the last 5 years, large crops and strong demand for vegetable oils. Crush is expected in increase another 2.5% in 2011/2013 above 2011/2012 expected crush levels of 8.0 MMT. Production in 2012/2013 of oils is forecasted at 3.3 MMT, almost 3% above 2011/2012 expected levels. High production will keep imports relatively flat in 2012/2013 compared to 2011/2012 levels. High production is expected to pull down imports in 2011/2012. Increased production and continued strong demand will fuel exports. Exports in 2012/2013 are expected to reach 2.76 MMT, a 3.76% increase over 2011/2012 expected levels of 2.66 MMT.
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