Market looks past tight Canadian grain, oilseed stocks

Carryover stocks of most major grains and oilseeds in Canada were tighter on July 31 than they were at the same point in 2012 — but new-crop production is expected to more than make up for smaller ending stocks, according to market participants.

Statistics Canada on Friday pegged Canadian canola ending stocks at 608,000 tonnes — in line with trade guesses, but still the tightest in nine years and well below the five-year average of 1.8 million. Canola stocks at the same time the previous year came in at 707,000 tonnes.

“There are some pretty low numbers here, but there are no huge surprises and with the big crops coming in (the stocks) are reduced in importance,” said Ken Ball of PI Financial in Winnipeg.

While canola stocks may be on the tight side, most market participants are now anticipating a record-large crop this year of over 16 million tonnes. Adding the new-crop supplies to the carryover, “we’ll have the largest starting canola stocks in history,” said Ball.

However, he added, solid demand and increased domestic crusher capacity would keep the carryover from rising too much by July 2014.

All-wheat stocks as of July 31, at 5.057 million tonnes, were in line with trade estimates but below the five-year average of 6.4 million and the 2012 level of 5.932 million.

However, with 2013-14 wheat production now estimated by StatsCan at over three million tonnes above the previous year’s level, at 30.562 million tonnes, the tighter wheat carryover was also not a large concern for the market, according to participants.

Durum stocks were pegged at 1.151 million tonnes, which compares with the year-ago level of 1.486 million and the five-year average of 1.712 million.

Barley stocks, at 983,000 tonnes, compared with 1.195 million in 2012 and the five-year average of about 2.0 million.

Oat stocks were tight, at 511,000 tonnes, which compares with 810,000 in 2012 and the five year average of just over one million.

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

Table: A recap of Statistics Canada’s stocks report for the period ended July 31, 2013. Figures are in millions of tonnes. Pre-report estimates provided for comparison.

  Total stocks, Total stocks, Total stocks,
  July 31, 2013, July 31, 2013, July 31, 2012,
  actual estimates actual
All wheat 5.057 3.700 – 6.500 5.932
   Durum 1.151 0.900 – 1.300 1.486
Canola 0.608 0.250 – 0.900 0.707
Barley 0.983 0.700 – 1.200 1.195
Flaxseed 0.071 0.050 – 0.080 0.137
Oats 0.511 0.200 – 0.500 0.810

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