Canada: Total Oilseeds

2015/2016

Canola (Rapeseed)

Soybean

Sunflower Seed

TOTAL

Area Harvested

8,100

2,280

39

10,419

Production

15,550

6,500

70

22,120

Crush

7,600

1,600

0

9,200

Imports

125

300

25

450

Exports

8,500

4,100

55

12,655

2014/2015 (e)

Canola (Rapeseed)

Soybean

Sunflower Seed

TOTAL

Area Harvested

8,075

2,235

29

10,339

Production

15,555

6,049

55

21,659

Crush

7,100

1,600

0

8,700

Imports

75

300

25

400

Exports

8,700

3,900

45

12,645

2013/2014

Canola (Rapeseed)

Soybean

Sunflower Seed

TOTAL

Area Harvested

8,009

1,860

28

9,897

Production

17,966

5,359

52

23,377

Crush

6,979

1,539

0

8,518

Imports

66

343

25

434

Exports

9,174

3,471

49

12,694

All data in 1,000 hectares and 1,000 metric tons.

Marketing year: Aug/July except peanuts which is Oct/Sept.

Total Oilseeds: Canadian grain and oilseed farmers were delaying planting decisions this year according to seed sales made by mid-February. The dependence of Canadian grain and oilseed farmers on the export markets means that they are watching world production and supplies closely. While large world supplies of oilseeds are forecast in 2015/2016, the depreciation of the Canadian dollar against the American dollar which will help support exports, a return to more average carry-in stocks levels, and attractive prices relative to other western crops are expected to support a small, two percent increase in oilseeds production over the previous year's production. Assuming average yields, total oilseed production in Canada is forecast to rise to 22,120 thousand metric tons (TMT).

Crush in 2015/2016 is forecast to rise to 9.20 MMT, six percent from 2014/2015 estimated crush of 8.70 MMT. This increase is expected to be driven by strong domestic stocks, good crush margins and anticipated increased crush capacity due to Cargill's Camrose, Alberta crush facility being online. The facility will be able to crush 2,500 tonnes of canola per day when working at capacity. The plant will begin operations in 2015, and has begun accepting deliveries of canola as of March 20; however a date by which the plant would be operating at full capacity has not yet been given. Crush for 2014/2015 is anticipated to reach 8.70 MMT due to strong supplies and attractive prices for meal and oil.

Despite increased competition internationally, a depreciated Canadian dollar and strong domestic supplies are anticipated to keep total oilseeds export levels close to the five-year average. Decreases in canola exports, in part due to more going to domestic crush, is forecast to be off-set by increases in soybeans exports. Total exports are forecast to reach 12.665 MMT in 2015/2016, a marginal increase over 2014/2015 anticipated export levels. In 2014/2015, strong international prices, high domestic supplies, improved flow along north and south corridors (compared to the previous year) and a depreciated Canadian dollar are driving exports of total oilseeds. Year to date data show a large export push in the first quarter of the marketing year, but this pace has slowed as more international competition comes onto the market. Total oilseeds imports are forecast at 450 TMT due to reduced domestic supplies resulting from a smaller carry-over than in previous years. Year to date trade data suggest that total oilseed imports for crop year 2014/2015 will be pulled down to 400 TMT from 434 TMT in 2013/2014 due to strong domestic availabilities combined with a depreciated Canadian dollar.

Policy Developments:

Transportation:

Deficiencies in rail capacity continue to be a topic widely studied and debated. A return to relatively lower supplies compared to previous years, in addition to less competition from the oil industry due to significantly lower oil prices, will help transportation flows and velocity along all corridors in 2015/2016. In addition, mandatory grain volume movements to ports imposed on Canada's two main railways, Canadian National Railway and Canadian Pacific, which some believe were resulting in poor service to north to southern transportation corridors expired on March 28, 2015, and are not expected to be an issue for the 2015/2016 forecast year.

The Canada government has undertaken a review of the Canada Transportation Act to review its current policies and study what needs to be amended in order to address its future needs. The dependence of Canada's agricultural sector on export markets means that the grain and oilseed industry has been very active on providing information on what reforms should be made. The report is expected to be presented to the Canadian Parliament by December 2015. There has also been an increased effort from the federal government (through funding) as well as the grain, oilseed, and special crop industry as well to render public information on railway performance.

Bee Health:

Bee Health continues to be a going concern to the agricultural industry in Canada, especially in Eastern Canada (Ontario and Quebec) where production of corn and soybeans is most prominent. Pollinators are an important factor in canola production. The province of Ontario is proposing changes to the pesticide regulation, under the Pesticides Act, to address the impact that they believe pesticide exposure is having on pollinator health. The Ontario government has proposed new regulatory requirements to reduce the number of acres planted with neonicotinoid corn and soybean by 80 per cent by 2017. The regulatory proposal is available for public comment until May 7, 2015. If approved, it will take effect on July 1, 2015.

Also on the issue of pollinator health, the National Bee Health Roundtable held its third workshop in March 2015. The objective of the group is to develop a National Bee Health Action Plan with key objective to address factors factor affecting bee health.

RAPESEED (CANOLA), OILSEED

Production, Supply and Distribution Estimates:

Oilseed, Rapeseed

2013/2014

2014/2015

2015/2016

Market Begin Year

Aug 2013

Aug 2014

Aug 2015

Canada

USDA Official

New post

USDA Official

New post

USDA Official

New post

Area Planted

8,010

8,070

8,075

8,225

0

8,225

Area Harvested

8,009

8,009

8,075

8,075

0

8,070

Beginning Stocks

588

588

2,363

2,363

0

2,018

Production

17,966

17,966

15,555

15,555

0

15,550

MY Imports

66

66

100

75

0

125

MY Imp. from U.S.

60

60

100

75

0

125

MY Imp. from EU

0

0

0

0

0

0

Total Supply

18,620

18,620

18,018

17,993

0

17,693

MY Exports

9,173

9,174

8,600

8,700

0

8,500

MY Exp. to EU

5

64

5

65

0

0

Crush

6,979

6,979

7,200

7,100

0

7,600

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

105

104

139

175

0

175

Total Dom. Cons.

7,084

7,083

7,339

7,275

0

7,775

Ending Stocks

2,363

2,363

2,079

2,018

0

1,418

Total Distribution

18,620

18,620

18,018

17,993

0

17,693

1000 HA, 1000 MT

Statistics Canada seeding intentions were not available at the time of this report. However, discussions with industry revealed much uncertainty with regards to planting decisions at a time of year when these decisions are usually nearly completed. Canola is highly dependent on the export markets with between fifty and sixty percent of the production going to export markets. Despite large world supplies anticipated for the 2015/2016 marketing year and the prospect of relatively flat prices or perhaps even negative prices compared to the current marketing year, the resilience of the crop remains very appealing to producers. In addition, the prospects of an early spring which is favorable to canola planting, a return to more average carry-in stock levels and attractive prices relative to other crops is forecast to push area planted above the five year average of 7.6 million hectares to 8.225 million hectares, which matches the previous year's levels. Production, assuming normal yields, it expect to reach 15.6 MMT. While profitability and the resilience of the crop continue to result in increasing area seeded to canola, there have been some rotation issues being reported with canola due to tight rotations. At this time these are not generalized and so have not yet had an impact on planting decisions on average. While the official position of the Canola Council of Canada is that canola rotations with other crops may be reduced to every two years from four years, they emphasize that this be done only if appropriate good agricultural practices and soil management techniques are followed.

Lower domestic supplies combined with high world supplies and more seed going to domestic crush due to increased crush capacity are forecast to result in canola exports falling to 8.5 MMT for marketing year 2015/2016. This represent a two percent decrease from expected 2014/2015 export levels of 8.7 MMT. High supplies, strong demand and a depreciated Canadian dollar are expected to push 2014/2015 canola exports well above the five year average of 7.9 MMT. In marketing year 2013/2014, top markets for canola seed were China (51% share), Japan (23% share), Mexico (15% share), the United States (11.6% share) and the UAE (3% share).

Seed going to domestic crush is forecast to rise to 7.6 MMT in 2015/2016 from an estimated 7.1 MMT in 2014/2015 due to an increase of domestic crush capacity. Domestic crush capacity is expected to increase to 9.5 MMT with the Cargill crush facility in Camrose Alberta coming on line fully by crop year 2015/2016. Canola stocks are forecast to be drawn down in 2015/2016 due to the forecast increase in production being too small to offset the lower carry-in stocks and increase in domestic usage for crush.

Policy Developments:

Industry Targets Set: The Canola Council continues to promote its 2025 Strategic Plan which sets targets that the industry should strive to reach by 2025. The plan calls for Canadian oilseed producers to increase canola production to 26 MMT by 2025. This is an increase of 44% over 2013/2014 production levels of 18 MMT. The plan calls for most of this increase to be done through yield improvements. The goal is to reach yield levels of 52 bushels per acres, up from 2013/2014 yield levels of 40 bushels per acres. The Canola Council plan sets export (seed) targets of 12 MMT by 2025, up 40 percent from 2013/2014 levels. They also want domestic processing to nearly double by 2025 increasing from 7.5 MMT to 14 MMT.

Canola Council Strategic Plan Highlights

Current (2013/2014)

Target in 2025

Increase

acres (in millions)

19.8

22.0

11%

yeild (in bushels per acre)

31.2

40.0

28%

production (in MMT)

18

26.0

44%

domestic processing

7.5

14.0

87%

exports (seed, in MMT)

8.5

12.0

41%

Canola producers continue to develop premium markets for identity preserved (IP) crops. Some of the existing markets for growers to produce IP canola with specific characteristics include: canola containing omega-3 fatty acids, high-oleic canola, and non-genetically engineered. Currently, 15.5 percent of canola acres are seeded to high oleic and specialty canola varieties. The Strategic Plan calls for one third of canola acreage to be seeded to high oleic and specialty oils by 2025.

Canada-South Korea Free Trade Agreement: The Canada-South Korea Free Trade Agreement came into force on January 2015. It is too early to determine the impact that the free trade agreement has had on South Korea/Canada trade in oilseeds. Canola seed, oil and meal is now able to enter the Korean market tariff-free, and it is anticipated that will allow Canada to significantly increase export sales to South Korea.

SOYBEAN, OILSEED

Oilseed, Soybean

2013/2014

2014/2015

2015/2016

Market Begin Year

Aug 2013

Aug 2014

Aug 2015

Canada

USDA Official

New post

USDA Official

New post

USDA Official

New post

Area Planted

1,860

1,869

2,240

2,251

0

2,300

Area Harvested

1,860

1,860

2,235

2,235

0

2,273

Beginning Stocks

178

158

282

243

0

442

Production

5,359

5,359

6,050

6,049

0

6,500

MY Imports

340

343

300

300

0

300

MY Imp. from U.S.

291

339

285

285

0

285

MY Imp. from EU

0

2

0

0

0

0

Total Supply

5,877

5,860

6,632

6,592

0

7,242

MY Exports

3,471

3,471

3,700

3,900

0

4,100

MY Exp. to EU

975

1,185

1,100

1,100

0

1,100

Crush

1,537

1,539

1,675

1,600

0

1,600

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

587

607

600

650

0

650

Total Dom. Cons.

2,124

2,146

2,275

2,250

0

2,250

Ending Stocks

282

243

657

442

0

892

Total Distribution

5,877

5,860

6,632

6,592

0

7,242

1000 HA, 1000 MT

While soybeans have been grown in Canada for more than 60 years, it is only in the last ten years that area seeded to soybeans has shown significant growth in provinces outside Quebec and Ontario. This growth is mainly due to new varieties being developed for Western Canadian climates. Like canola, the resilience of the crop and the profitability of the crop, as well as high oilseed prices have led to increasing interest in soybeans by Western Canadian farmers. Manitoba production of soybeans currently accounts for 20% of total soybean production in Canada, and has been steadily increasing largely due to the development of early maturing, high yielding soybeans with good protein, combined with good climatic and agronomic conditions found in the Red River Valley and the Almassippi region. Total area seeded to soybeans is expected to grow another two percent in 2015/2016, and, with a return to average yields, soybean production is forecast to reach 6.5 million metric tons. This represents a seven percent increase over the previous year's production levels. Another reason for producer interest in soybeans is the fact thatthe soybean has a different disease profile than canola and wheat so fits well in the crop rotation.

As Canadian soybean production has increased, an increasing proportion of production has gone to export markets. For 2015/2016, exports are forecast to increase to 4.1 MMT, which represents a 5 percent increase over the previous year's anticipated export level of 3.9 MMT. China has proven to be a large importer of Canadian soybeans in 2014/2015 and is expected to remain so in 2015/2016.

While there are discussions of the value of building a soybean crush facility in the Canadian Prairies, there are no current plans to expand soybean crush capacity in year 2015/2016. Current soybean crush capacity is 3.2 MMT. Domestic crush in 2015/2016 is expected to remain at 1.6 MMT, the same level expected for 2014/2015.

The top five export market for soybeans in 2013/2014 were China (22% share), the United States (18% share), the Netherlands (12% share), Japan (11% share) and Belgium (6% share). There are 4 key export segments for Canadian soybeans: GM soybeans for crush (US market), soybeans for food (Asia), non GM for crush (EU) and non-GM food grade (Japan, Asia and the EU). In 2014/2015, non-GMO soybeans accounted for the 17% of the total soybean production. Non-GM soybeans can compensate producers by paying premiums ranging from $.60 to $7.00 per bushel.

Policy Developments:

Creation of SoyCanada: In 2014, a national voice for the soybean industry was created with representation from across the value chain. Soy Canada's mandate is to address industry challenges and opportunities from a national perspective. In particular, its activities will focus on maintaining and expanding market access, opening new markets, increasing the industry profile, and strengthening relationships among stake holders.

Responding to Product Differentiation: Canadian soybean producers are increasingly focused on capturing premiums through the identity-preserved program which is managed by the Canadian Grains Commission. Three quarters of soybean exports to Asia are now classified as identity preserved (IP). Canadian Identity Preserved Recognition System (CIPRS), which is operated by the Canadian Grain Commission, is a rigorous, fully traceable program that covers all aspects of soybean production and processing from seed to export. Canadian oilseeds producers are well positioned to be able to meet the new interest in quality assurances that is being requested by consumers.

SUNFLOWER SEED, OILSEED

Production, Supply and Distribution Estimates:

Oilseed, Sunflowerseed

2013/2014

2014/2015

2015/2016

Market Begin Year

Aug 2013

Aug 2014

Aug 2015

Canada

USDA Official

New post

USDA Official

New post

USDA Official

New post

Area Planted

28

28

29

30

0

40

Area Harvested

28

28

29

29

0

39

Beginning Stocks

18

18

8

5

0

5

Production

52

52

55

55

0

70

MY Imports

25

25

25

25

0

25

MY Imp. from U.S.

25

22

25

22

0

22

MY Imp. from EU

0

3

0

3

0

3

Total Supply

95

95

88

85

0

100

MY Exports

49

49

45

45

0

55

MY Exp. to EU

0

1

0

1

0

1

Crush

0

0

0

0

0

0

Food Use Dom. Cons.

8

11

8

10

0

10

Feed Waste Dom. Cons.

30

30

30

25

0

30

Total Dom. Cons.

38

41

38

35

0

40

Ending Stocks

8

5

5

5

0

5

Total Distribution

95

95

88

85

0

100

1000 HA, 1000 MT

The National Sunflower Association of Canada estimates that approximately 65 percent of national production is of the confectionary type processed in the shell or dehulled for the snack market and/or the baking industry. As a result, the United States is the primary supplier of sunflower seed oil to Canada which is a preferred oil in fryer use in food manufacturing and restaurants due to its nutritional composition and longevity in fryer utilization. High-oleic sunflower oil is commonly used in cosmetics given its long stable shelf life. Given the higher price point of sunflower seed oil, many food manufacturers in recent years have adapted recipes to use a blend of sunflower and other oils, mainly canola oil, in fryer applications to gain some of the benefit of fryer longevity and nutritional value at a lower cost.

PEANUTS

Production, Supply and Distribution Estimates:

Oilseed, Peanut

2013/2014

2014/2015

2015/2016

Market Begin Year

Oct 2013

Oct 2014

Oct 2015

Canada

USDA Official

New post

USDA Official

New post

USDA Official

New post

Area Planted

0

0

0

0

0

0

Area Harvested

0

0

0

0

0

0

Beginning Stocks

3

3

3

3

0

3

Production

0

0

0

0

0

0

MY Imports

130

163

135

149

0

156

MY Imp. from U.S.

105

115

110

115

0

115

MY Imp. from EU

0

130

0

130

0

130

Total Supply

133

166

138

152

0

159

MY Exports

0

8

0

10

0

9

MY Exp. to EU

0

0

0

0

0

0

Crush

0

0

0

0

0

0

Food Use Dom. Cons.

130

155

135

139

0

147

Feed Waste Dom. Cons.

0

0

0

0

0

0

Total Dom. Cons.

130

155

135

139

0

147

Ending Stocks

3

3

3

3

0

3

Total Distribution

133

166

138

152

0

159

1000 HA, 1000 MT

Peanut production in Canada is constrained by climatic conditions. Agriculture extension reports indicate that a minimum of 3,000 corn heat units is required for normal growth and development. Peanuts grown in areas with fewer heat units will not reach optimum maturity and generally the yield is too low to justify commercial production. As a result, minor peanut production is limited to a few farms in southern Ontario that plant in the range of 200-400 hectares. As a result, Canada is a net importer of peanuts with the United States and China being the top suppliers.