WASHINGTON, D.C., U.S. — Canada's oilseed production (canola, soybeans and sunflowers) for 2016-17 is forecast to drop to 21.5 million tonnes, down 2 million tonnes from 2015-16, mostly driven by lower canola production, the U.S Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) said in a April 22 report. Total crush is forecast to fall to 9.75 million tonnes, a 5% decrease from the 2015-16 anticipated crush levels of 10.2 million tonnes. 

Crush is projected lower in 2016-17, resulting from lower projected oilseed supplies and a corresponding drop in exports. Canola crush is raised 100,000 tonnes in 2015-16 as a result of large domestic supplies and greater crush capacity. In 2015-16, healthy domestic supplies, increased domestic crush capacity, a depreciated Canadian dollar, a recovering U.S. livestock industry, and increased demand from China are all supporting greater than expected exports. 

Canadian grain and oilseed producers are highly dependent on export markets and therefore watch world supplies and government policies closely, the report said. As a result of lower oilseed prices and higher returns on pulses, area planted to oilseeds is projected to decline by 3.4%, as reported by Statistics Canada seeding intentions survey results. Based on the seeding intentions, the report forecasts total oilseeds production to fall to 21.505 million tonnes in 2016-17. This decrease is attributed to lower area seeded and a return to average yields, and represents a 2.035 million tonnes decrease from 2015-16 production. Generally, the decision to plant oilseeds has been driven by their resilience and often offer attractive returns compared to other field crops. However, this year, lower prices combined with higher pulse prices have resulted in some oilseed acreage, particularly canola, being shifted to pulses.

Lower domestic supplies will limit crush in 2016-17. Therefore, crush is forecast to fall to 9.75 million tonnes, a 4.6% decrease from anticipated crush levels of 10.2 million tonnes. The high crush volume in 2015-16 is reflective of abundant domestic supplies, good crush margins, and the increased crush capacity. A new crush facility came on-line in July, 2015.

In 2016-17, lower domestic supplies are expected to limit exports, which are forecast to fall to 12.09 million tonnes from 14 million tonnes, a 16% drop from 2015-16. In 2015-16, healthy domestic supplies, continued strong world demand, and the depreciation of the Canadian dollar against the U.S. dollar have supported strong exports. 

In 2016-17, total oilseed imports are forecast to rise to 510,000 tonnes due to lower domestic supplies resulting from a smaller carry-in and slightly lower production than last year. This forecast is16.7% higher than the anticipated 2015-16 level of 425,000 tonnes.