Canola stocks in Canada are poised to plummet by 77% to a 12-year low thanks to declining production and extra demand from new crushing plants, official statistics have revealed.

Canada's canola stocks will plunge to from 2,600m tonnes this July to 600m tonnes a year later, Statistics Canada, the country's statistics bureau, said.

Canada's canola stocks rarely fall below 1,000m tonnnes, and have not been lower than 600m since July 1998, Statistics Canada archives show.

While Canada - the world's single biggest producer of canola or its close relative, oilseed rape – will harvest 19.7% less of the crop next season, with output dropping to 10.2m tonnes, exports will remain "historically large".

Meanwhile, industrial demand will rise by 29% to 5.50m tonnes after the opening of two large canola crushing facilities.

The tighter market should support a rise of about 5% in canola prices, Statistics Canada said, forecasting average prices within the range of Can$450-550 a tonne next season, compared with Can$450-500 a tonne in the year to this July.

Wheat prices to fall

Wheat, however, the country's biggest crop, was poised for a drop in prices thanks to abundant global stocks, the bureau said, factoring in data from the Canadian Wheat Board.

Prices for mainstream varieties would fall by 7.4% to Can$276 a tonne with durum, the main raw material for pasta, tumbling 22% to $282 a tonne.

Wheat farmers were also poised for a smaller harvest next season, despite larger acreages, as yields fall back near to trend levels from the highs achieved last year. Total wheat production will drop by 9.5% to 25.9m tonnes, Statistics Canada said.

Overall grains and oilseeds production will fall by 9.6% to 65.6m tonnes, the report added.

Canada is poised to produce12.6m tonnes of canola this year, ahead of America's 12.0m tonne forecast for China's rapeseed crop, albeit behind the 19.1m tonnes estimated for the European Union's 27 states together.