Canola Stocks Heading to a 13-Year Low Despite Significant Prairie Drought Recovery — The Acreage Decision Remains Unresolved

April 22, 2026  |  Western Farm Report — Crop Reports

Canadian Crop Conditions

Soil Moisture: A Material Improvement, With Caveats

The most recent Canadian Drought Monitor data, as of March 31, 2026 (Agriculture and Agri-Food Canada, National Agroclimate Information Service), shows 32% of Canada’s agricultural landscape classified as abnormally dry or in moderate to severe drought. This represents a significant improvement from February, when 60% of the country’s agricultural land was in drought — a nearly 50% reduction driven by above-normal March precipitation across much of the Prairies and central Canada.

The improvement is not uniform. Southern Alberta and southwestern Saskatchewan continued to see above-normal temperatures and below-normal precipitation through March, with conditions in those areas degrading further. Northern regions of Alberta and Saskatchewan benefited from well above-normal precipitation, which reduced long-term deficits. The Prairies specifically saw 39% of agricultural land classified as abnormally dry or in drought at month-end, down from 58% the previous month. The Prairie agricultural landscape recorded 21% classified as abnormally dry or facing drought at the end of March 2026, compared with 47% at the end of February and 32% one year earlier.

The net picture heading into the seeding window: broad moisture improvement across much of the Prairies, but persistent dryness concentrated in the south-central and southwestern zones. In-season precipitation timing will remain the primary yield swing variable for 2026-27.

Source: AAFC Canadian Drought Monitor — Current Conditions

Seeding Intentions: What Producers Said in January

Statistics Canada’s Principal Field Crop Areas release (March 5, 2026; survey conducted December 12, 2025–January 16, 2026) establishes the baseline for 2026 planting intentions across the Prairies.

• Canola: 21.8 million acres nationally (+1.0% year-over-year), roughly in line with the five-year average. Saskatchewan 12.2 million acres (+0.5%), Alberta 6.3 million acres (+0.7%), Manitoba 3.2 million acres (+4.7%).
• Wheat (all types): 26.7 million acres nationally (-1.1%). Spring wheat -0.1% to 18.8 million acres. Durum -2.4% to 6.4 million acres. Winter wheat -6.7% to 1.6 million acres. Alberta spring wheat up 3.6% to 6.8 million acres.
• Barley: Up 5.0% nationally to 6.4 million acres. Saskatchewan +7.9% (2.4 million acres), Alberta +5.2% (3.5 million acres).
• Lentils: Down 5.5% to 4.1 million acres nationally. Saskatchewan 3.6 million acres (-4.3%), Alberta 489,500 acres (-13.4%).
• Dry peas: Down 12.3% to 3.1 million acres nationally. Saskatchewan -16.6% to 1.5 million acres, Alberta -3.9% to 1.4 million acres.

A standing caveat applies to all of these figures: the survey closed January 16, 2026 — before China’s tariff reduction on Canadian canola seed took effect (March 1), before the Iran conflict drove fertilizer cost and supply concerns materially higher, and before March precipitation events significantly improved Prairie moisture conditions. The Statistics Canada seeded area report due June 30, 2026 will be the first measure of what actually went in the ground.

Source: Statistics Canada — Principal Field Crop Areas, 2026 (March 5, 2026)

Canola: Tightening Stocks, Record Crush, An Unresolved Acreage Question

2025-26 season (current crop year): Canola production reached a record 21.8 million tonnes, up 13% from 2024-25 and 19% above the five-year average, surpassing the previous record of 21.5 million tonnes set in 2017-18. Total 2025-26 supply is estimated at 23.5 million tonnes. The Canadian Grain Commission’s Harvest Sample Program rated 95% of submitted canola samples as No.1, with average oil content of 43.6%. Crush through the end of January 2026 reached 6.1 million tonnes, running 2% ahead of last year’s pace. Canola exports lagged last year’s pace by 27% as of Week 30, though the gap had been narrowing since China re-entered the market. The 2025-26 carry-out is forecast at 2.8 million tonnes.

2026-27 demand acceleration: AAFC’s April 18, 2026 Outlook revised the 2026-27 canola balance sheet significantly tighter than the March edition. Domestic crush for 2026-27 was raised by 500,000 tonnes to a projected record 13 million tonnes, driven by the opening of Cargill’s 1 million-tonne-per-year crush plant in Regina and record crush margins sustained by surging soybean oil values. The 2026-27 export forecast was raised 100,000 tonnes to 7.8 million tonnes — but still below 2025-26 (8.2 Mt) and well below 2024-25 (9.3 Mt). With 13 million tonnes of domestic crush demand plus 7.8 million tonnes of exports, ending stocks for 2026-27 are now projected at 1.064 million tonnes — the lowest carryout since 2012-13. AAFC characterizes this as approaching minimum pipeline levels with export demand rationing likely required.

The acreage tension: Statistics Canada’s January survey placed canola intentions at 21.839 million acres — below the pre-report analyst consensus of approximately 22.3 million acres. The survey predates both the China tariff resolution and the fertilizer cost shock, so actual seeded area could diverge in either direction. The March 18, 2026 AAFC Outlook places the 2026-27 canola price forecast at $650 per tonne (No.1 Track Vancouver) — below the five-year average of approximately $800 per tonne. Whether that price level is sufficient to retain or expand acres against elevated input costs is the central unresolved question of the 2026 seeding window.

Source: AAFC — Canada: Outlook for Principal Field Crops, 2026-03-18  |  April 18, 2026 Outlook: agriculture.canada.ca/en/sector/crops/reports-statistics

Wheat and Durum

Total wheat supply for 2025-26 is estimated at a record 44.2 million tonnes. Exports to Week 30 were tracking 8% ahead of last year and 20% above the five-year average, with strong shipments to China, Bangladesh, Ecuador, and Spain. The 2025-26 Saskatchewan spot price for CWRS 1 (13.5% protein) holds at $265 per tonne; the 2026-27 forecast is $275 per tonne — one of the few price forecasts moving in a positive direction in this cycle, supported by continued geopolitical tension in the Middle East and steady global demand.

Durum carry-out for 2025-26 is projected at 1.45 million tonnes — a significant stock build from 2024-25’s tight 496,000-tonne close, driven by the exceptional 2025 Prairie harvest. The 2026-27 durum area is forecast at 2.58 million hectares nationally (-2%), with Alberta producers showing a notable 11.8% reduction in durum intentions. The 2026-27 Saskatchewan CWAD 1 (13% protein) price holds at $280 per tonne, reflecting ample global durum inventories and improving production prospects in North Africa.

Source: AAFC — Canada: Outlook for Principal Field Crops, 2026-03-18

Barley

The 2025-26 barley crop reached 9.7 million tonnes (+19% year-over-year, +9% above the five-year average), with total supply estimated at 11.0 million tonnes. Exports in the first five months of 2025-26 were nearly 1.5 million tonnes, with China taking 55% of shipments. The 2025-26 Lethbridge feed barley price is forecast at $270 per tonne. For 2026-27, national barley area is projected to rise 5.0% to 6.4 million acres, with Alberta holding approximately 55% of national area. Production is expected to normalize at approximately 8.3 million tonnes as yields return to trend. The 2026-27 Lethbridge price holds at $270 per tonne. Barley’s lower input requirements relative to canola are directly relevant to 2026 acreage allocation decisions where fertilizer cost pressures are most acute.

Source: AAFC — Canada: Outlook for Principal Field Crops, 2026-03-18

Pulses: Record Carry-In, Compressed Prices, Acreage Pulling Back

Dry pea carry-out for 2025-26 is projected at 1.31 million tonnes, with a stocks-to-use ratio of 42% — more than double a normal year. The 2025-26 average pea price is forecast at $300 per tonne, down sharply from $405 per tonne in 2024-25. China’s removal of 100% tariffs on Canadian peas took effect in early March 2026, providing some export relief. India’s tariff barriers on Canadian peas and lentils remain largely in place, and a larger anticipated Indian domestic pulse crop is a bearish signal for import demand. For 2026-27, dry pea area is projected at 1.25 million hectares, down from 1.42 million hectares.

Lentil carry-out for 2025-26 is projected at a record 1.695 million tonnes, with a stocks-to-use ratio of 74%. The average lentil price is forecast at $510 per tonne, down sharply from $790 per tonne in 2024-25. Area for 2026-27 is projected at 1.674 million hectares, down from 1.772 million hectares. For producers weighing pulse crops as a rotation alternative to canola, the price outlook and market access situation both counsel caution.

Source: AAFC — Canada: Outlook for Principal Field Crops, 2026-03-18

Decision Context

1. Canola Domestic Crush at Record Levels — Structural Shift in Market Configuration

The April 18, 2026 AAFC update projects 2026-27 domestic canola crush at 13 million tonnes, with Cargill’s new Regina plant now online and crush margins sustained at record levels by soybean oil market conditions. With ending stocks projected at 1.064 million tonnes, the domestic balance sheet is constrained enough that export demand rationing is likely regardless of access conditions with China. Canola is transitioning from an export-constrained to a crush-constrained market configuration. The farmgate price of $650 per tonne still sits well below the five-year average, and crush economics benefit processors before producers. Acreage retention at or above the January intention level of 21.8 million acres is what the supply side of the balance sheet requires.

For full analysis of US biofuels policy and canola oil demand signals, see WFR US Markets.

2. Fertilizer Cost and Supply Shock — Input Economics Shifting Rotation Calculations

The Iran conflict has driven sharp increases in fertilizer costs and supply uncertainty since the Statistics Canada survey closed in January. Nitrogen and phosphorus costs are directly relevant to canola economics — it is the most input-intensive crop in common Prairie rotation. The cost shock adds economic rationale for shifting acres to barley and nitrogen-fixing pulses, though pulse prices remain suppressed. The magnitude of the fertilizer cost change and its influence on actual seeded area will not be visible until the June 30 Statistics Canada release.

For current fertilizer price levels, supply chain conditions, and on-farm input economics, see WFR Input Prices.

3. China Market Re-entry — Canola Exports Partially Restored, Volume-Constrained

China reduced anti-dumping duties on Canadian canola seed to approximately 15% effective March 1, 2026, and suspended tariffs on canola meal and peas. Canada shipped 114,223 tonnes of Canadian canola to China in February before the change formally took effect (Statistics Canada), and CGC weekly data confirms continued strong flows since. The limiting factor is not access but total exportable surplus: with domestic crush absorbing 13 million tonnes and ending stocks at minimum pipeline levels, the system has limited capacity to expand exports above the 7.8 million tonne forecast. Producers should not interpret China’s return to the market as a farmgate price catalyst — the structural constraint is now on the crush side, not the export side.

For full analysis of Canada-China trade conditions and canola trade flows, see WFR Asia Intel.

4. India Market Still Closed to Pulses — No Near-Term Price Recovery Signal

India’s tariff barriers on Canadian peas and lentils remain in place, and a larger anticipated Indian domestic pulse crop in 2026 adds further downward pressure on import demand. The China tariff removal on peas provides partial relief but does not compensate for India’s market weight for lentils in particular. Producers considering pulse acres as a lower-cost rotation alternative to canola should weigh the probability that pulse prices remain suppressed through the 2026-27 crop year. The $300 per tonne pea and $510 per tonne lentil price forecasts are the relevant benchmarks against cost of production.

For analysis of India and China pulse trade conditions, see WFR Asia Intel.

What to Watch

• Statistics Canada — Stocks of Principal Field Crops as of March 31, 2026. Release date: May 6, 2026. First quantitative read on system-wide stocks at quarter-end. Canola data will signal the pace of China’s export absorption since March 1.
• Statistics Canada — Seeded Area Report. Release date: June 30, 2026, based on late May/early June survey data. The definitive measure of 2026 acreage outcomes — whether canola area held at or above the 21.8 million acre January intention, and how barley, wheat, and pulse areas responded to the fertilizer cost and price signals.
• AAFC Canadian Drought Monitor — April 30, 2026 Update. The March 31 reading showed 32% of Prairie agricultural land in abnormal dryness or drought, down from 60% in February. The April 30 release will show whether improvement is holding or whether southern Alberta and southwest Saskatchewan are re-expanding as spring temperatures rise. Available at agriculture.canada.ca.
• AAFC Weekly Crop Report — Seeding Progress. The AAFC Consolidated Weekly Crop Report begins capturing meaningful seeding progress data in late April and through May. First substantive pace-vs-five-year-average readings will emerge over the next two to three weeks.

Suggested Further Reading

AAFC — Canada: Outlook for Principal Field Crops, 2026-03-18 (Tier 1 primary source — full supply/disposition tables for all crops)

AAFC — Reports and Statistics, Principal Field Crops (April 18, 2026 Outlook posted here when indexed)

Statistics Canada — Principal Field Crop Areas, 2026 (March 5, 2026) (Tier 1 primary source)

AAFC — Canadian Drought Monitor, Current Conditions (Tier 1 primary source)

Canadian Grain Commission — Grain Statistics Weekly (Tier 1 primary source)

Western Farm Report is not affiliated with or endorsed by the Government of Canada, Agriculture and Agri-Food Canada, Statistics Canada, or the Canadian Grain Commission.

This post was produced with AI assistance. All sources are attributed and linked. Western Farm Report editorial standards apply.

Tags: canola, seeding intentions, crop report, Prairie drought, soil moisture, Canadian Grain Commission, Statistics Canada, AAFC, crop outlook, fertilizer costs