StatsCan stocks numbers confirm rapid export pace

(Dave Bedard photo)

CNS Canada — Canada’s grain and oilseed exports appear to be in fine form, based on the latest stocks figures on Thursday morning from Statistics Canada.

Stocks of wheat, canola and oats are all down compared to last year’s. In wheat’s case, there were roughly five million fewer tonnes in farmers’ bins at the end of 2015, compared to the year before.

“It certainly confirms the idea Canada has been moving a fair bit of wheat, which is good,” said Ken Ball of PI Financial in Winnipeg.

All wheat total stocks as of Dec. 31, 2015 is pegged at 20.68 million tonnes, which compares to 25.62 million tonnes in the previous year.

“Steady exports have really helped chew through wheat which has been a relatively good news story for the Canadian farmer,” agreed Jonathon Driedger, a senior market analyst with Farmlink Marketing Solutions near Grunthal, Man.

The numbers suggests feed usage was a factor too, according to another analyst.

“It looks like we’ll have a significant drop in carryout stocks (wheat) year over year at the end of the crop year,” said Jerry Klassen, manager of the Canadian office for Swiss-based GAP S.A. Grains and Products.

Ball said he doubts the numbers will impact the market all that much.

“The wheat numbers won’t have a big impact; it just tells us we’re moving more wheat out of Canada than the U.S.,” said Ball.

As for canola, the stocks report came in half a million tonnes lower than in 2014. Canola total stocks as of Dec. 31, 2015 are pegged at 12.12 million tonnes, which compares to 12.6 million the year previous.

At least one analyst believes there is still more canola sitting in Canadian farmers’ bins than first thought.

“Considering that the rate of usage is at a record pace… and the recent whack of Chinese and Pakistan business we had with no market reaction, this tells me there is more canola out there than is being reported,” said Mike Jubinville of Pro Farmer Canada.

This didn’t necessarily mean it would be bearish for prices, he said, but it would limit canola’s ability to launch a sustained rally.

The number for canola seems to indicate the previous Statistics Canada production number of 17.2 million tonnes was pretty close to the actual tally, Ball said.

While some analysts feel the production number was too high, today’s StatsCan numbers should put that to bed, he said.

“If anything history would dictate that in these kinds of circumstances StatsCan’s (estimate) is usually too low.”

Oat stocks as of Dec. 31, 2015 are pegged at 2.55 million tonnes, compared to 2.553 million tonnes the year previous.

Jubinville said he feels the StatsCan number for oats means the market will continue to grind along at lower price levels.

The Chicago futures price for oats also seemed to have grown “disconnected” from the Prairie cash market, he added.

The report pegged flaxseed at 732,000 tonnes as of December 31, 2015, up from 590,000 tonnes at the end of 2014.

“The size of the stocks level that we see right now suggest this is a sloppy, grindy kind of marketplace,” he said.

Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow CNS Canada at @CNSCanada on Twitter.

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