Canada Markets

AAFC Cuts 2018/19 Grain Stocks

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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The blue bars represent the year-over-year percent change forecast for selected Canadian grain stocks from the 2017/18 crop year to 2018/19 based on September AAFC estimates. The brown bars represent the percent change from the five-year average (2013/14 through 2017/18). (DTN graphic by Cliff Jamieson)

Agriculture and Agri Food Canada's September supply and demand tables were adjusted to account for the Aug. 31 production of principal field crops estimates released by Statistics Canada as well as the Sept. 6 release of the stocks of principal field crops report. Given these estimates, in addition to current estimates for demand over the crop year, ending stocks of the major field crops in Canada or principal field crops are expected to fall by 24% in the year ahead to 11.885 million metric tons (mmt), while reported by AAFC to be 15% below the five-year average.

Given current estimates, tightening stocks across the grains and oilseeds could be viewed as a theme, with stocks of all crops forecast to fall by 25.8% from July 31, 2018, to 10.345 mmt, which includes Aug. 31 estimates for corn and soybeans. Stocks of total pulses and special crops are forecast to fall by a lesser amount of 6.8% to 1.54 mmt.

As seen on the attached graphic, which focuses on select crops, the major crops are all expected to show a year-over-year reduction in stocks in this month's data, as indicated by the blue bars. On a percentage basis, the largest year-over-year declines shown for the selected crops are expected for canola (47.7%), durum (32.1%) and soybeans (29.5%), with the year-over-year decline shown in brackets. Note that the 1 mmt decline in the forecast for 2018/19 canola stocks to 1.250 mmt is despite a 500,000-mt reduction reported in the estimate for canola exports, from 11.5 mmt to 11 mmt. Last week's USDA estimates left Canada's canola export potential at 11.6 mmt.

Of the pulses and special crops reported by AAFC, the largest crops of dry peas and lentils are forecast to see stocks fall over the next crop year given current estimates. These year-over-year declines offset year-over-year increases forecast for stocks of dry beans, chickpeas, mustard and sunflower seed. Stocks of canary seed are expected to remain unchanged over the next crop year at minimal levels.

On Wednesday, Sept. 19, everything changes again with Statistics Canada's release of its model-based production estimates, which tend to lead to a larger estimate than seen in the earlier survey-based results for most crops and will add to the uncertainty given two back-to-back production estimates released utilizing different methodology.


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