Canadian Wheat and Canola Stocks Below Year-Ago

Posted on 03/09/2017 10:23 AM

As of March 31, Statistics Canada reports total stocks of Canadian wheat, canola and soybeans were lower compared with the same date in 2015. Meanwhile, total stocks of corn for grain, barley and oats increased year over year. The following table is a recap of Statistics Canada's stocks report for the period ended March 31, 2016.

canadian_stocksMay2016"Wheat
Canadian wheat stocks totaled 13.8 million tonnes as of March 31, the smallest in eight years, down 23.8% from the same day a year earlier, but pretty much in line with trade expectations. This decrease resulted from a lower stock level on farms, down 28.4% to 9.8 million tonnes, and a 9.4% decline in commercial stocks to 4.0 million tonnes. Wheat stocks held on farms accounted for 71.0% of total wheat stocks.

An aggressive export pace this year relative to tighter supplies to open the marketing year suggest year-end carryout this year will decline to a bottom-of-the-barrel low. Quite a contrast to global wheat stocks which remain record large.

PFCanada and Ag Canada currently forecast all-wheat ending stocks for 2015-16 at only 4.000 million tonnes (July 31), which I view as being "de facto zero." Today's stocks report helps confirm we are indeed headed down to this type of year-end stocks result.

Canola
As of March 31, total canola stocks were down 10.1% from the same day a year earlier to 7.5 million tonnes, down from last year but towards the higher end of trade expectations. This decrease resulted from a 12.9% decline in farm stocks to 5.9 million tonnes. Stocks held on farms in Saskatchewan were down 16.5% to 2.8 million tonnes, while farm stocks in Alberta fell 18.9% to 2.0 million tonnes. However, commercial stocks rose 2.1% to a new high of 1.6 million tonnes.

While canola stocks were slightly above expectations, they were still well below last year and year-end carryout remains on a tightening trend given record demand (exports/domestic crush). While the report may have some negative influence on canola market this morning, market attention will quickly revert to new-crop seeding conditions. And if you have seen the firestorm which has literally obliterated Fort McMurray Alberta this week (city of 90,000 is unbelievably gone in an instant), you might know that dryness concerns are developing in Alberta/Sask.

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Doesn't change the big picture situation from the canola price outlook as a multi-year trend towards declining Canadian canola carryout remains intact-- just starting from a bigger number is all. But that said, canola futures have ticked slightly lower on the news this morning.

Barley and oats
A bit of a bearish surprise on barley, stocks increased 12.1% to 3.8 million tonnes as of March 31, reflecting a 15.5% gain in production in 2015.

Trade was generally looking for a decrease relative to last year at this time. But as I pointed out previously, an unusually mild winter suggests that the efficiency of feed conversion in the animals was better this year - less feed needed per pound of animal gain as they did not have to contend with harshly cold winter temperatures. Nonetheless, I'm comfortable in making the big feed barley cash sale we did earlier this week.

Following a 15.1% rise in oat production in 2015, total oat stocks increased 9.3% to 1.8 million tonnes compared with March 31, 2015. Both farm stocks ( 5.8%) and commercial stocks ( 37.2%) were up from the same day last year. Still nothing great to report on the oat market -- price trend remains grind, grind, grind.
 

The views, opinions and positions expressed by the author are theirs alone and do not necessarily reflect the views, opinions or positions of Pro Farmer.

 

 

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