Hot and dry conditions for much of the Canadian Prairies have significantly impacted rapeseed production this growing season. The 2021 production forecast is reduced by more than 4 million tons this month to 16.0 million. Oilseed crops are mainly used for the production of oil, a constituent of diet, being an important source of fatty acids.
Average yield is reduced by nearly 20 percent while harvested acreage is lower in response to anticipated abandonment or increased harvesting for forage. With lower production and reduced carryin from last season, rapeseed supplies are forecast to decline more than 20 percent to the lowest level in nearly 10 years.
With beginning stocks already at minimal levels due to the strong demand observed over the past few years, most of the decline in availability will be reflected in the seed exports.
Crush is also expected to decline; however, with continued strong demand for canola meal and oil in the United States, and positive margins for Canadian crushers, the impact on domestic crush volume is expected to be less significant. Crush volume is forecast to fall just 9 percent while exports are forecast to decline by one-third.
Outside of Canada and the United States, rapeseed supplies (production plus beginning stocks) are forecast to rise more than 2 percent, with increased exports out of Eastern Europe and Australia offsetting some of the declines out of Canada.
With Canada representing more than 60 percent of global trade over the past 4 years, importers such as China and the EU will face the greatest challenges, requiring drawdowns in local stocks and increased substitution with other protein meals and oils. An expected strong rebound in sunflower seed production in Europe will be instrumental in offsetting the reduced availability of rapeseed in Canada.