Canada’s national statistical office, Statistics Canada, issued its 2019 planting intentions report on April 24th. The report was based on surveys sent to 11,500 farmers in major cropping provinces. Responses were taken in March and were noted to have been collected after trade issues regarding canola seed shipments to China had begun. In the wake of the uncertainty surrounding new crop canola demand, farmers reported intentions to reduce canola seedings by 0.607 million hectares or 6.6 percent in 2019 to fall to 8.625 million hectares. This came in about 202,000 hectares below the average published trade guesses reported by news services. Farmers also relayed intentions to cut back soybean plantings in 2019 as well, with acreage projected to decline by 273,000 acres or 10.7 percent to fall to 2.285 million acres. This was counter to the average trade guess for soybean seedings to expand slightly to 2.590 million hectares. If realized, 2019 would mark the second-consecutive drop in Canadian soybean plantings since farmers seeded a record 2.947 million hectares in 2017. Combined, Canadian farmers are expected to reduce plantings of the nation’s top two oilseeds by 879,000 hectares in 2019. This represents a decline of 7.5 percent from 2018 levels. Data from realized seeding is scheduled to be released in June and will add a degree of clarity to the Canadian oilseed supply outlook. The following chart shows the recent rise in Canadian soybean output, and also shows the trend for exports – not domestic processing – to expand along with production.
In addition to uncertainties surrounding demand for oilseeds from top buyer China, the lower seedings projection is also believed to reflect depressed global oilseed prices due to current supply levels. Lower prices are expected to signal that farmers will need to cut back on plantings until either fresh demand or a crop shortfall in a major exporting region result in higher prices needed to re-incentivize expansion to oilseed plantings.
