Western Canadian farmers will be planting more canola this spring than in 2013, according to projections from international grain trader Louis Dreyfus.
Tracy Lussier, manager of canola trading with Louis Dreyfus Canada, shared the company's acreage and production estimates at the Wild Oats Grainworld Conference in Winnipeg last week.
"We expect canola acres to increase by about 1.5 million across Western Canada to around 21.5 million. That's a seven or eight percent increase year-on-year," he explained.
With a return to more normal yields, the company is projecting a 16.7 million tonne crop, which would be almost 9 percent smaller than in 2013.
Lussier explains their projections are partly based on the ratio between new crop canola and wheat futures prices.
"During the time when producers were making a lot of their decisions with regards to canola seed, which typically is between October and December, the ratio very strongly favoured canola. In other words, the profitability of canola versus wheat was very high at the time," he said.
As for last year's crop, much of it is still in farm storage.
"There's a tremendous amount of canola in bins on farm right now. It's hard to move into the commercial system because our logistics are jammed up, so we expect about a 3 million tonne carryout this year, and that's if logistics perform up to expectations for the rest of the crop year," said Luissier.
Canola crushers are also not operating at full capacity, despite the ample supplies on farms.
"It's very difficult to move seed into Eastern Canada where some of our crush capacity lies, so they're crushing more soybeans and less canola. We can't see getting adequate supplies for them to crush until we iron out some of the logistical problems," he noted. "The logistical problems have also slowed down the movement of product out of plants, which has somewhat limited the crush in Western Canada."
Tracy Lussier, manager of canola trading with Louis Dreyfus Canada, shared the company's acreage and production estimates at the Wild Oats Grainworld Conference in Winnipeg last week.
"We expect canola acres to increase by about 1.5 million across Western Canada to around 21.5 million. That's a seven or eight percent increase year-on-year," he explained.
With a return to more normal yields, the company is projecting a 16.7 million tonne crop, which would be almost 9 percent smaller than in 2013.
Lussier explains their projections are partly based on the ratio between new crop canola and wheat futures prices.
"During the time when producers were making a lot of their decisions with regards to canola seed, which typically is between October and December, the ratio very strongly favoured canola. In other words, the profitability of canola versus wheat was very high at the time," he said.
As for last year's crop, much of it is still in farm storage.
"There's a tremendous amount of canola in bins on farm right now. It's hard to move into the commercial system because our logistics are jammed up, so we expect about a 3 million tonne carryout this year, and that's if logistics perform up to expectations for the rest of the crop year," said Luissier.
Canola crushers are also not operating at full capacity, despite the ample supplies on farms.
"It's very difficult to move seed into Eastern Canada where some of our crush capacity lies, so they're crushing more soybeans and less canola. We can't see getting adequate supplies for them to crush until we iron out some of the logistical problems," he noted. "The logistical problems have also slowed down the movement of product out of plants, which has somewhat limited the crush in Western Canada."