Small South American crop is a known-known, but the world is adjusting to the reality that it might need as much Canadian origin canola as logistically possible to accommodate new risks of what happens if (i) Ukraine 2.5 MMT winter planted canola crop faces input or harvest impairment, (ii) Ukraine cannot plant or logistically manage all or part of 7 mil hectares of spring sunflower plantings. Most of sunny area is in E ½ of Ukraine, in the war zone. Know that Ukraine exports about 6 MMT of sunoil per year and uses about 0.5 MMT for domestic. If 6 MMT was a canolaoil, at 42% oil would required 14 MMT of canola. At the margin, that is massive…and that right there is the reason why new crop canola is trending the way it is. Main short term risk would be an immediate truce to war or a world wide government effort to relax biofuel mandates. Unprecedented times requires unconventional thinking.
10 Mar, 2022