This spring’s wet weather in the Canadian Prairies could increase the likelihood that Canada’s canola production, which was already slated to drop 7% this year, will fall further as the pressures facing the global oilseed market mount.
Canola is the genetically modified version of rapeseed, and Canada is the world’s top rapeseed producer.
Typically, Saskatchewan, Canada’s largest canola producing province, has its canola crop seeded by the end of May. But, as of May 30 this year, only 66% of Saskatchewan’s crop was planted. This time last year 96% of the canola crop was planted.
Saskatchewan’s canola farmers might be able to address their planting gaps as the province’s canola-growing areas are expected to be dry for the next 7 days. But heavy rains are in the extended forecast.
Canada’s canola production potential will be critical this year as global stocks of major oilseeds, such as US soybeans, are minimal, and oilseed prices are high. Additionally, Chinese demand for Canadian canola is poised to increase. In mid-May, China lifted its three-year restriction on Canadian canola imports.
Global vegetable oil prices, which have been climbing for the better part of two years, have been particularly volatile since February, when the onset of the Russia-Ukraine war halted shipments of sunflower oil from the Black Sea region. Sunflower oil represents about 10% of all vegetable oil consumed globally.
Despite high oilseed prices, farmers in the Canadian Prairies are planting cereal crops instead of canola this year, according to Statistics Canada’s 2022 acreage projections. Last year the region’s crippling drought saw Saskatchewan’s canola yields drop 48.6% from 2020’s levels. Gro’s Climate Risk Navigator, weighted to focus on Saskatchewan’s canola growing areas, shows the sharp differences in Gro Drought Index readings and soil moisture levels between this year and last.
Gro’s Climate Risk Navigator for Agriculture enables users to evaluate and compare growing conditions anywhere in the world, in real time and on a historical basis. The application’s ability to weight growing conditions for a specific crop is a valuable function when crops are spread widely within a country and when yield forecast models aren’t available.
Click here to download Gro’s Strategic Insight, Fuel for the Fire: The Russia-Ukraine War and Vegetable Oil Prices, to learn more about what’s driving global vegetable oil prices.
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