Canada Markets

Statistics Canada's report this week suggested Dec. 31 canola stocks were at 7.4 million metric tonnes, more than 2 mmt lower than the same date in 2011. The tight stock situation is not new to the industry, as it's been apparent for some time that canola rationing will be required this crop year.

As of week 27, the crop year is now 52% complete. Total canola exports, at 4.203 million metric tonnes, represent 58% of the 7.2 mmt export forecast issued by Ag Canada. Year-to-date exports are 16% below last year, although 1.3% ahead of the three-year average. Weekly exports in week 27, at 169,500 mt, were higher than the average weekly export level for all 27 weeks (155,182 mt) and also higher than the average export level over the past 10 weeks (150,880 mt). The red bars on the attached chart indicate the aggressiveness of the export program.

Total canola crush as of week 27, at 3.498 mmt, represents 54% of the 6.5 mmt of crush demand forecast by Ag Canada. Year-to-date crush is 0.9% ahead of last year and 22.3% ahead of the three-year average. The weekly crush in week 27, at 109,100 mt, was below the average crush for all 27 weeks (134,415 mt) and also below the previous 10-week average crush at (135,810 mt). Domestic crush is backing off.

Coincidentally, both the year-to-date exports and the year-to-date crush, as reported by the CGC, are roughly 3 mmt below Ag Canada's annual forecast of 7.2 mmt and 6.5 mmt. In a perfect world, each sector would have 120,000 mt to work with on a weekly basis through the balance of the crop year, leaving an incredibly tight 350,000 mt carry-out. The problem being, it's not a perfect world! One has to further question if the numbers are right and is the grain even out there to meet this forecast? Would love your feedback!

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

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