Canola acres are poised to climb from just above the 20 million mark last year, but how high will the final tally be? Could we pass the 22 million acre record set in 2012?
Dwight Nichol of DLN AgVentures thinks so.
“I have a number in my balance sheet right now of 22.5 million acres,” he says in the interview below. “And my gut feels like there might even be upside to that.”
“There are more sellers than buyers of acres is what it boils down to,” says Nichol, noting lentils and durum will be some of the main losers after the problems with crop quality last year.
With domestic crush demand proceeding at a record pace*, he says the 22.5 million acre figure isn’t as scary for the market as would have been in the past. Assuming average yields and demand, Nichol figures we would see a 2.3 million tonne carryout in the summer of 2018. Lower prices could draw that ending stock number below 2 million.
“So even with a huge canola seeded acreage with an average crop, the demand that we’ve seen lately, it’s not scary,” he says.
Nichol joined Shaun Haney to discuss the canola market on RealAg Radio:
*Domestic canola processors set a new weekly crush record last week of 208,268 tonnes, according to the Canadian Oilseed Processors Association’s weekly stats. Year-to-date crush is still running about 13 percent ahead of last year, while YTD crush capacity utilization is estimated at 90.2 percent versus 83.9 percent a year ago.