Canada Markets

Agriculture and Agri-Food Canada (AAFC) released updated Canadian supply and demand tables late Friday, which took into account the Dec. 4 Statistics Canada production estimates and highlight the challenges faced by the Canadian industry in clearing the massive production achieved in the 2013/14 crop year.

Total grains and oilseeds production in the country were increased by 9.24 million metric tonnes to 90.073 mmt since the November Canada: Outlook for Principal Field Crops was released, when supply and demand tables included the much lower September estimates that were released by Statistics Canada in early October. Total supplies of grains and oilseeds were increased by 10.2% to 99.856 mmt since the November report, while Canada's export potential was increased only 5.5% to 39.568 mmt since last month. Carryout stocks were increased by 46% to 21.565 mmt since the November report, a level which has increased by 144% from the 2012/13 crop year.

Wheat exports are forecast to reach 17.3 mmt, up from the previous 16 mmt forecast. Assuming a steady pace of shipments over the 52-week crop year, 332,692 metric tonnes are required to be shipped weekly to meet this target. As of week 19, the year-to-date exports are below the pace required to meet this goal. Despite a forecast for higher movement, ending stocks are forecast to increase 135.5% from 2012/13 levels to 9.2 mmt, the highest level seen in data going back to 1996. Ending stocks as a percentage of 2013/14 disappearance are 35.7%, up from 16.9% in 2012/13.

Durum ending stocks are forecast to increase 91% from last crop year to 2.2 mmt, while durum exports are forecast to increase to 4.650 mmt from last year's 4.245 mmt and the previous forecast of 4.5 mmt. Given a steady pace of movement, weekly exports will need to total 89,423 mt. Year-to-date exports are just slightly below this pace. Ending stocks are forecast to be the largest since the 2009/10 carryout of 2.694 mmt. Ending stocks of 2.2 mmt are 40% of the estimated 2013/14 demand, up from 23% in the 2012/13 crop year.

With the 2013/14 canola production bumped 29.5% from year-ago levels to 17.960 mmt in the December Statistics Canada report, exports were bumped only 200,000 mt to 8.2 mmt, still well below the 2011/12 record of 8.699 mmt; 157,692 mt must be exported weekly to achieve this level over the crop year, while as of week 19 data, year-to-date exports are just slightly behind the pace needed to meet this level of exports. Domestic crush was left unchanged at 7.2 mmt for 2013/14. Ending stocks were increased 1.6 mmt from November's estimate to a level which is 393% above the 2012/13 carryout, expected to be 3 mmt. This represents a stocks/use ratio of 19%, up from 4.3% in the previous crop year.

Higher production estimates also boosted ending stocks for barley, oats and corn. Barley ending stocks have been increased 171% from year-ago levels to 2.2 mmt, the largest level seen since the 2009/10 crop year. According to the latest forecast, corn ending stocks will increase 120% to 3.4 mmt, which is the largest carryout in Stats Canada data going back to 1996. The Canadian oat carryout is forecast to increase 135% from the 2012/13 crop year to 1.2 mmt, the largest seen in data going back to 1996 on the Stats Can website.

Total production of pulse and special crops in Canada was increased 5% since the November release from Ag Canada which used earlier production data, resulting in total production of 6.5 mmt. The forecast for exports also increased 5% to 5.030 mmt since November, while ending stocks are expected to climb only 5,000 mt from last month to 975,000 mt.

Higher levels of production lead to upward revisions in the carryout for both peas and chickpeas, with the pea carryout forecast 20,000 mt higher than in November at 520,000 mt, or 15% stocks/use, up 1% from last month. The chickpea carryout was forecast to be 30,000 mt higher than the November forecast at 115,000 mt, with the stocks/use ratio jumping from 57% in November to 89% this month. This would be the highest level of chickpea carryout since data began in 2003.

Despite a higher level of production, lentil ending stocks were reduced from the November estimates due to a 200,000 mt increase in export potential. Ending stocks are forecast to be 295,000 mt, down from last year's 300,000 mt, leaving the stocks use ratio at 16%, up 2% from last 2012/13.

A reduction in seeded acres combined with an increase in potential exports has resulted in a tight sunflower seed carryout of 5,000 mt, down from the November estimate of 15,000 and also below last year's 17,000 mt. The stocks/use ratio for 2013/14 is reported at 6%, down from last year's 16%.

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

(ES)

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