CANADA – Canadian soybean exports to China increased by 230% through the first half of MY 2018/19 despite a decline in production, according to the Global Agricultural Information Network report from the U.S. Department of Agriculture.

The report attributed the increase to a record high production in Ontario, high carryover stocks, and Eastern Canadian access to U.S. soybean imports.

In the year, total soybean production decreased by 13% as area planted declined in some areas such as Manitoba and Saskatchewan.

USDA has predicted strong area planted in Ontario in the year 2019/20 and further area declines in the prairies, where canola, wheat, durum, green peas, and flax offer better gross margins.

Soybean crushing entered the year with high crushing capacity, bolstered by a doubling of soybean meal exports to the European Union through the first half of the year.

Canola production decreased 5% in the forecast period as total supplies remained relatively flat due to high ending stocks the previous year.

Canola exports declined 14% for the first half of 2018/19 driven by traditional importers transitioning substituting Canadian canola for U.S. soybeans.

USDA predicted increased canola area planted in MY 2019/20, despite an uncertain global oilseed market and agronomic concerns associated with the spread of clubroot disease.

Canola oil production is expected to increase over the longer-term in Canada as trade agreements in key markets, like Japan and Vietnam are expected to bring down tariff rates.

“FAS/Canada expects canola area planted to climb one percent in MY 2019/20, on sustained profitability relative to alternative crops despite a volatile oilseed trade outlook.

Soybean area planted is expected to retreat further eastward in MY 2019/20, ceding prairie area to wheat planted to wheat, as low moisture levels and weaker soybean prices increase the economic risks of planting soybeans in the prairie provinces,” said USDA.

Area planted with wheat is expected to increase and remain ahead of canola as farmers across the prairies reduce plantings of soybeans and lentils on diminished exports prospects.

The report indicates that total soybean exports have been trending upwards over the previous three marketing years, driven by strong demand from China, which has become Canada’s single most important soybean customers.