Stocks report confirms strong canola, wheat usage

The stocks in all positions report from Statistics Canada on Monday was generally within expected pre-report parameters, but confirmed usage of canola and wheat were stronger than anticipated, industry analysts said.

"The stocks of canola on-farm and in commercial position as of March 31 was interesting and had friendly price implications for the futures, but it will not likely be enough to support the market itself," said Ron Frost, a grain/oilseed analyst with Frost Forecast Consulting of Calgary.

Statistics Canada pegged canola supplies in Canada on March 31 at 4.273 million tonnes. Pre-report expectations had been calling for a stocks total of 4.2 million to 4.8 million. Canola stocks at the same time a year ago were 6.157 million tonnes.

Usage of canola was definitely aggressive and means that the rationing of the commodity through to the end of the crop year on July 31 will continue, said Ken Ball, a broker with Union Securities in Winnipeg.

He agreed the numbers should have a supportive influence on canola futures, but will likely be overshadowed by the direction the CBOT (Chicago Board of Trade) soybean complex takes.

The most interesting aspect of the StatsCan canola forecast is that 2011-12 canola output must have been at least one million to 1.3 million tonnes higher than what has been reported, Frost said.

"I track the weekly export and domestic usage of canola and based on the demand for the commodity, production must have been higher or otherwise we would be virtually out of supply," Frost said.

Statistics Canada pegged all wheat stocks at 14.479 million tonnes, which fell within the pre-report range of 14.4 million to 15.3 million tonnes. All wheat stocks at the same time a year ago totalled 15.803 million tonnes.

Durum stocks as of March 31 were 3.002 million tonnes, which came in above pre-report ideas that ranged from 2.7 million to 2.9 million. Durum supplies at the same time a year ago were 3.056 million tonnes.

"The most interesting aspect of the all-wheat forecast was that it confirmed that usage of feed wheat in the livestock sector was greater than had been anticipated," said Mike Jubinville, an analyst with ProFarmer Canada.

He said feed wheat definitely displaced high-cost barley during the winter months and was at least double what it would normally be.

Ball said the durum estimate from StatsCan was larger than anticipated and, combined with the large acreage expected for durum this spring, the end result could be a much higher than expected supply base heading toward the 2012-13 crop year which begins Aug. 1.

Barley supplies in Canada were pegged by StatsCan at 3.140 million tonnes. Pre-report expectations had called for a supply position of three million to 4.1 million tonnes. At the same time a year ago, barley stocks totalled 3.54 million tonnes.

Oat stocks totalled 1.323 million tons. Pre-report ideas ranged from 1.3 million to 1.8 million tons, while supplies at the same time a year ago were 1.694 million.

Table: A recap of Statistics Canada’s stocks report for the period ended March 31, 2012. Prereport expectations are provided for comparison purposes. Figures in millions of tonnes.

  Total stocks Total stocks Total stocks
  March 31, 2012 March 31, 2012 March 31, 2011
  Actual Estimates Actual
All wheat 14.479 14.400 15.300 15.803
   Durum 3.002 2.700 2.900 3.056
Canola 4.273 4.200 4.800 6.157
Barley 3.140 3.000 4.100 3.540
Oats 1.323 1.300 1.800 1.694

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