REDUCTIONS USDA sees major drop in some production areas, but stays steady on Canadian canola
Production of the world’s oilseeds was trimmed back by the United States Department of Agriculture last week, which forecast 625.38 million tonnes for 2022-23 in its world markets and trade report.
In March, the USDA pegged global production at 629.89 million tonnes. But despite the reduction in April, it’s still a significant increase from the 609.21 million tonnes of oilseeds the world produced in 2021-22.
The lion’s share of oilseeds belongs to soybeans at 369.64 million tonnes, of which about 42 per cent will come out of Brazil in 2022-23. Rapeseed (and canola) are second at a distant 87.16 million tonnes, followed by sunflower seeds at 50.44 million.
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There’s little doubt the abundance of oilseeds in the world will weigh on prices. However, that would be slightly mitigated as total global ending stocks will continue to remain well below 20 million tonnes. In March, the USDA placed ending stocks at 17.01 million tonnes, which were later bumped to 17.45 million.
The massive soybean crop being harvested in Brazil, which the USDA pegged at 154 million tonnes, is not only a record but it more than makes up for the losses incurred by Argentina.
The Rosario Grain Exchange once projected the 2022-23 Argentina soybean production at 47 million tonnes. Since then, a devastating drought has wrought havoc on soybeans as well as corn. On April 13 alone, the exchange hacked off four million tonnes, bringing its estimate to 23 million.
The recent USDA report was somewhat more optimistic at 27 million, but there’s a good chance that number will be cut in May.
As for rapeseed and canola, the USDA remains steadfast that Canadian production for 2022-23 will be 19 million tonnes when all is said and done. That’s second place in the world, exceeded only by the European Union at 19.54 million tonnes.
Agriculture and Agri-Food Canada has been sticking to 18.17 million tonnes in its supply and demand reports. That’s unlikely to change until Statistics Canada issues a new set of production estimates.
In the meantime, eyes are turning to spring planting. On the Canadian Prairies it’s becoming a question of how much moisture there could be when farmers start making their rounds. Parts of the region still lack adequate soil moisture, while a few other areas should be all right. Farmers in the Red River Valley of southern Manitoba are likely to be delayed because of a flood that’s about to occur.
