Canada Markets

The largest year-over-year reduction in the level of March 31 stocks for any grain reported this week was seen for canary seed, with Statistics Canada's March 31 stocks reported at 39,000 metric tonnes, down 54% from the 85,000 mt reported as of March 31 last year. Statistics Canada stocks data goes back to 2000 and this by far is the lowest volume seen for the end of March. The five-year average is 114,000 mt, while the 10-year average is 156,200 mt.

Given historical disappearance in the April-through-July period, this level of stocks would leave the market extremely short of supplies. The average April-through-July disappearance over the past five years is 71,000 mt, indicating that little more than bin bottoms should exist by the end of the crop year.

Meanwhile, conflicting data was reported just weeks ago with Agriculture and Agri Food Canada's (AAFC) monthly supply and demand data. One of the very few changes reported in April was adjustments made to canary seed demand, with a reduction to domestic demand offset by an increase to exports to 143,000 mt from last month's 125,000 mt. This week's sales data released by Statistics Canada would suggest this crop year's sales to the end of March are 101,600 mt. Given the low estimate for stocks, this inflated sales projection may be deemed impossible to reach.

This speaks to the challenges in estimating the small crop data. One government body is tightening stocks on paper while another is increasing the crop's export potential. The market is taking all of this in stride and not acting as would be expected given such a potential tight situation. Average prices delivered to Saskatchewan plants reached the lowest level since September 2010 in February at 19.14 cents/lb and have since pushed gradually higher to the most recent 20.71 cents/lb.

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

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