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WINNIPEG, (Manitoba): Canadian farmers intend to expand canola plantings as they look to cash in on record high prices, but not as aggressively as expected, a government report showed on Tuesday. Canola plantings looked to reach 21.5 million acres, up 3.6% from last year and the biggest area in three years, Statistics Canada reported. The estimate was well below the average trade guess of 22.6 million acres in a Reuters survey, and below even the lowest prediction.

Soaring demand for the yellow-flowering oilseed has soaked up much of the leftover stocks from last year, as countries including China import more canola. Crushers process canola into oil to use in food products or to produce cleaner-burning diesel, as well as into meal for animal feed.

“The price and the math suggests that number should be a lot higher,” said Jon Driedger, analyst at LeftField Commodities.

Farmers have other profitable crop options to plant, however, and many hesitate to seed canola too often, which can lead to disease problems, he said.

Canada is the biggest shipper of canola, a cousin of rapeseed used largely to produce vegetable oil.

Smaller than expected plantings, combined with dry Prairie soils that could limit growth add to concerns about thin canola supplies for export or domestic crushing beyond the next harvest, Driedger said.

“Someone’s simply got to use less.”

ICE Canada November canola futures pared their gains after the report, having hit a fresh record high earlier in the session.

Planting has just begun on the Canadian Prairies, with most seeding done in May.

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