Canada Markets

Agriculture and Agri-Food Canada's latest supply and demand tables for August forecast ending stocks of all principal field crops to fall by 1.745 million metric tons or 11.3% to 13.725 mmt by the end of 2018/19.

The attached graphic shows how this looks given a number of selected crops. Of the selected crops shown, durum is the only crop where current forecasts point to a year-over-year increase in ending stocks of 7.1%. When all principal field crops are included, significant increases in stocks are forecast for chickpeas, with stocks expected to rise by 145,000 metric tons or by 2,900%, while mustard stocks are expected to rise by 37.5%,

Barring lentils, where ending stocks are forecast to remain unchanged at 800,000 mt, all other crops are forecast to see stocks fall over the 2018/19 crop year. By far the largest year-over-year changes are seen in flax, with stocks forecast to fall by 50% while dry pea stocks are forecast to fall by 60% by July 31 2019.

One thing that jumps out in this month's report is that the continued hot and dry conditions over much of the Prairies this month, including some all-time record daily high temperatures, had little or no effect on Prairie yield estimates in the August forecasts. The estimate for durum production was lowered by 300,000 mt this month, a move that made headlines given a close to 5% reduction in estimated yield due to "below normal precipitation in most of the durum growing areas." At the same time, yield estimates for crops such as wheat, barley, canola, soybeans, peas, lentils and chickpeas were unchanged from the July report.

While the interest in this report will wane quickly, Statistics Canada will release their first production estimates on August 31 along with their July 31 stocks report on September 6. A combination of these reports and the current forecast demand for 2018/19 could easily lead to a bullish surprise for some crops.

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Cliff Jamieson can be reached at cliff.jamieson@dtn.com

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(CZ)

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