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US canola production value likely to exceed $1 billion

Canola

The USDA, in its Oct. 12 Crop Production Report, released record U.S. canola production figures of 3.95 billion pounds, up 45 percent from 2.72 billion pounds last year. The total value of U.S. canola production will likely exceed $1 billion for the first time based off of this nearly 4 billion-pound crop. The USDA did revise canola acreage up from its June report as FSA data became available. The report showed a large difference in canola yields between North Dakota and Montana compared to normal. Canola yields also came up short in the Southern Plains states of Kansas and Oklahoma as they suffer through extremely dry conditions.

Production in both North Dakota and Washington will be the highest on record. Area planted for the U.S., at a record high 2.21 million acres, is up 13 percent from the June estimate and up 3 percent from last year’s area. The October yield forecast, at 1,826 pounds per acre, is 524 pounds above last year’s yield and will represent the third-highest average yield on record for the U.S.

The yield in North Dakota, by far the largest canola-producing state, is forecast at 1,920 pounds per acre, up 580 pounds from last year. This is the second-highest average yield for the state. Planted area in North Dakota is estimated at a record high 1.80 million acres, up 3 percent from last year. As of June 5, only 65 percent of the crop had been planted, 29 percentage points behind both last year’s pace and the 5-year average pace. Blooming of the canola crop began in late June. Crop maturity remained behind both last year’s pace and the 5-year average pace through July and August. Harvest began in mid-August and progressed to 93 percent complete by Oct. 9.

Canola yield reports out of Canada continue to lean to the disappointing side, according to many reports from growers. This will likely lead to a revision lower in the December canola production estimates to possibly less than 19 million metric tons (MMT). Earlier estimates had been as high as 20 MMT. Canola exports from Canada have finally increased, showing a level of 300,000 metric tons (MT) during the first week of October. Total crop year canola exports, however, are running behind last year's pace by over 25 percent, while domestic use is in-line with last year.

The November ICE canola contract finished the session on Oct. 12 at $864 per MT, up $5.60 on the day, and up over $26 per MT in the last two weeks. The January canola contract ended at $872 per MT, also up strongly in the last two weeks. The North America vegetable oils are reportedly being buoyed by strong biodiesel demand, which is keeping them from dropping as much as other world vegetable oil prices.

Local cash prices, as of Oct. 12, at nearby crush plants ranged from $27.42 to $28.80 for October and November deliveries, up marginally in the last two weeks.

The Northern Canola Growers Association will hold its 15th Annual Canola Research Conference on Wednesday, Nov. 16, at NDSU in Fargo, N.D. It will also hold its 25th Annual Canola Expo in conjunction with the Prairie Grains Conference on Dec. 7-8 in Grand Forks, N.D. Those interested in attending can get more information at www.northerncanola.com.

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