World rapeseed stocks are to plunge by 26%, despite the first drop in consumption in nine years, the International Grains Council said, even as CWB underlined weather threats to the important Canadian crop.
Global inventories of rapeseed and its canola variant will “tighten significantly” to 4.1m tonnes in 2015-16, the IGC said in its first full forecasts for next season.
The estimate reflected an expectation of a 67.8m-tonne world harvest, down 3.6m tonnes year on year, and downgraded 600,000 tonnes from a forecast made last month.
“World output is forecast to contract on smaller sowings and reduced yields, with output expected to fall in all key producers,” the council said.
The world’s biggest rapeseed harvest, the European Union’s, was seen coming in at 21.9m tonnes, a drop of 2.2m tonnes year on year.
However, larger concerns have surrounded the crop in Canada, the top exporting country, for which the IGC ditched idea of larger production this year, and forecast a drop of 700,000 tonnes to 14.9m tonnes in output.
The estimate reflected largely a drop in the estimate for sowings, after a surprisingly lower farmer planting intention figure revealed by official data earlier this month.
However, the IGC highlighted too dryness and cold which have hampered germination and growth.
“Concerns have also emerged over recent frosts, which pose a threat to the earliest seeded fields.”
‘Behaving quite bullishly’
The comments came as CWB, the former grain export monopoly for Canada’s Prairies, raised by up to Can$10 a tonne its price forecast for canola delivered into its pools, noting that futures “are behaving quite bullishly even while most other crop prices head the other direction.”
A rise of some 4% in Winnipeg canola futures from a May 13 low reflects “the sub-optimal germination and early development conditions across the Prairies over the last two weeks”, CWB said.
“Some areas of early-seeded canola have been affected by frost, while other areas are suffering from dryness that is impeding germination, or even causing producers to seed other crops in place of intended canola acres.
CWB added that while it was “too early to determine the overall impacts of the harsh spring weather, the risk is clearly leaning towards lower production at this juncture”.
‘First time in nine years’
The IGC forecast that trade in canola and rapeseed would fall by 1.0m tonnes to a five-year low of 12.9m tonnes next season, thanks to “thinner export availabilities”, and to the price-competitiveness of rival oilseed soybeans too.
“World rapeseed/canola use in 2015-16 is expected to fall for the first time in nine years, to 69.2m tonnes, as supplies tighten,” the council added, implying a 2.8m-tonne decline in consumption.
Use in both of the two biggest consumers, the EU and China, was seen declining by 500,000 tonnes year on year, to 24.8m tonnes and 18.7m tonnes respectively.
(Source – http://www.agrimoney.com/news/rapeseed-stocks-to-slump-says-igc-citing-canadian-woes–8395.html)