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The Canadian Department of Agriculture and Agri-Food (AAFC) revised its supply and demand forecasts on July 20, following earlier acreage and yield data from the Canadian Agricultural Statistics Office. This update projects increased production for major agricultural crops, particularly canola, for the 2026/27 marketing year (MY).
Due to expanded sowing areas, the AAFC significantly raised its canola production forecast for the 2026/27 MY, from 19.2 million tons (June estimates) to 21 million tons. Correspondingly, projections for domestic processing increased from 13.2 million tons to 13.75 million tons, and exports are now expected to reach 8 million tons, up by 0.5 million tons. Ending stocks for this period also saw an upward revision, moving from 1.31 million tons to 2.07 million tons.
For the preceding 2025/26 season, the export forecast for canola was modestly increased by 0.1 million tons to 8.5 million tons. Forecasts for domestic processing remained steady at 12.3 million tons, and ending stocks were held at 2.7 million tons.
Despite these bullish revisions to supply, canola futures on the ICE exchange in Winnipeg experienced a slight dip. November canola futures fell 0.9% yesterday to settle at 803 CAD/t, equivalent to $569/t. This decline occurred following a robust 4.5% surge the previous week, attributed to traders engaging in profit-taking and the downward pressure from the improved supply outlook. Over the past week, futures are still up 3.7%, and for the month, they show an impressive 8.7% gain.
The AAFC's report underscores Canada's agricultural sector entering the new season with strong production prospects. This favorable position is expected to comfortably meet the growing domestic demand from processors and satisfy global market requirements. Furthermore, current weather conditions across Canada are reported as highly conducive to fostering a robust canola harvest in the upcoming season.
Source: Ukrainian Electronic Grain Exchange