Statistics Canada this morning released its Canadian grain stocks as of July 31 based on a measure of commercially held stocks and a survey of 13,100 farmers across the country. The report showed Canada's total stock levels for wheat, canola and lentils were down from the same date a year earlier. Meanwhile, barley and oat stocks increased compared with July 31, 2015.
The following table is a recap of Statistics Canada's stocks report for the period ended July 31, 2016. Figures are in MMT:
Here`s the real surprise of this report. StatCan says Canadian canola stocks fell 20.7% to 2.0 MMT as of July 31...but that`s well above trade ideas of about 1.3 MMT.
We know that canola crushing during 2015-16 was at record levels and so too were exports. It's going to take me some time to review the numbers, but obviously StatCan did some major revisions to the supply side data and it may go back a couple of years and carried forward.
It's obviously there has been a significant production revision higher for either the 2015, or perhaps even 2014 or 2013 canola crops. Again, I'll review the data to discover more info. But it appears that StatCan added a massive 1.146 MMT to the 2015 canola crop, lifting it from 17.2 MMT to now 18.4 MMT.
In any event it appears there is much more canola around than previously believed. And it really makes one start to question whether StatCan's production estimate for 2016 (17.0 MMT) is also grossly understated?
The impact to price of this report has been negative, but not overtly so just yet. Canola futures posting $3 to $4/MT gains ahead of the report and then moved off its highs.
Total stocks of wheat fell 26.8% from July 31, 2015, to 5.2 MMT as of July 31, 2016. While down year-over-year, the number did come in about 1 MMT above trade expectations. No market impact.
Total barley stocks grew 18.6% to 1.4 MMT as of July 31, which was about in line with the average of trade expectations, so no surprise there.
As of July 31, total stocks of oats were up 38.2% compared with July 31, 2015, to 930,000 MT. Here as well, no real surprise to the trade.
Overall stocks of lentils fell 80.0% from July 31, 2015, to 73,000 MT as of July 31, 2016. While this already well known news sent lentil prices soaring higher this year, the impact of this report is negligible in the face of a record large harvest anticipated for 2016.