StatsCan grain stocks report neutral on markets

(Resource News International) — Few surprises were seen in Statistics Canada’s report on grain stocks in all positions for the period ended March 31, as estimates for the main crops came well within pre-report expectations.

Market participants commented that the focus of the market has already turned to new-crop issues.

“All the main numbers generally were in line with pre-report ideas with the exception being some of the specialty crop items such as lentils and mustard which were extremely tight,” said Mike Jubinville, an analyst with the farmer advisory service ProFarmer Canada in Winnipeg.

The flaxseed stocks level also confirmed that supplies of that commodity will be virtually non-existent at the end of the 2007-08 season that began on August 1, 2007.

The StatsCan canola estimate of 3.699 million tonnes (on-farm and in commercial position) was well within pre-report expectations that ranged from 3.328 million to 3.985 million tonnes. Canola supplies at the same time a year ago were 4.755 million tonnes.

“The canola number if anything might be described as being on the low side,” said Tony Tryhuk, vice-president and manager of commodity trading for RBC Dominion Securities.

“However, with the absence of fresh export demand around, there are few supportive tendencies for the commodity based on that number.”

Tryhuk acknowledged the on-farm canola number was also lower than normal, but considering strong cash bids over the winter offered by various outlets, producers were fairly aggressive in their deliveries.

The government agency pegged on-farm canola supplies as of March 31 at 2.468 million tonnes, which compares with 3.833 million at the same time a year ago.

“We saw some fantastic prices this year and based on that we should see a lot less on farm in comparison to previous years,” Tryhuk said. “Those on-farm canola supplies are where we should be at.”

StatsCan pegged Canada’s flaxseed supplies on farm and in commercial position at just 342,000 tonnes, which compares with the year-ago level of 736,000.

“The flaxseed estimate was definitely low and confirms that supplies are extremely tight and will get tighter,” said Ken Ball, a broker with Union Securities Ltd. in Winnipeg.

Jubinville felt that at the rate of usage, there will be next to no flaxseed stocks available at the end the 2007-08 crop year.

Barley stocks on farm and in commercial position were pegged by Statistics Canada at 4.46 million tonnes, compared with 4.572 million at the same time a year ago. Pre-report estimates had expected March 31 barley stocks to range from 4.3 million to 4.925 million tons.

“The market was probably pretty happy that the supplies of barley were not any tighter than they were,” Ball said. However, he said, the market has been anticipating these tight stocks for quite some time.

Barley supplies were seen as being the tightest on record, Jubinville said.

“However, we have been on that road for a long time, and given that barley prices are at all-time record highs, the estimates are not likely to give us a new sense of ‘wow’ to the market.”

All-wheat stocks were considered low relative to last year, but the market is likely to focus its attention mainly on the large U.S. winter wheat crop about to be harvested, Jubinville said.

All-wheat stocks in Canada as of March 31 totalled 10.825 million tonnes, according to StatsCan. This was down from the year ago level of 15.977 million and compares with pre-report expectations that ranged from as low as 9.85 million to as high as 11.89 million.

“Wheat supplies in Canada are tighter than they were at the same time last year, but I think the market place has already factored that in,” Jubinville said.

Oat stocks in Canada were also in line with trade expectations. Statistics Canada pegged oat stocks on farm and in commercial position at 2.017 million tonnes compared with 1.548 million a year ago. Pre-report ideas had called for oat supplies to range from 1.75 million to 2.142 million tonnes.

A quick summary of Statistics Canada’s grain and oilseed stocks report, as of March 31, 2008, with industry pre-report estimates for comparison. Stocks in millions of tonnes.

Pre-report March March
estimates 2008 2007
All wheat 9.850-11.890 10.825 15.977
Durum 1.875-2.190 2.058 3.175
Canola 3.328-3.985 3.699 4.755
Barley 4.300-4.925 4.460 4.572
Oats 1.750-2.142 2.017 1.548

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