This week, Agriculture and Agri-Food Canada updated monthly supply and demand tables for Canada's principal field crops. This report takes into account the latest Statistics Canada reports that includes the March 31 stocks report and the March seeding intentions report, combined with a long list of assumptions.
The attached chart shows the impact on current estimates on 2016/17 ending stocks relative to the previous year (brown bars), and 2017/18 ending stocks relative to the current crop year estimate (blue bars).
Perhaps the most bearish of the selected grains, based on current projections, is seen with corn. Ending stocks for 2016/17 were increased by 450,000 metric tons this month from the April estimate to a record 2.7 mmt, which is more than one million metric tons higher than the previous five-year average of 1.632 mmt while is up 20.4% from the previous crop year. Despite a slightly higher estimate for crop year exports, imports are also estimated higher, including a shipment from China onto Canada's west coast, while feed demand is estimated lower citing competition from feed wheat. Despite 2017/18 exports estimated at a four-year high of 1.7 mmt, lower imports and higher domestic feed demand, ending stocks are estimated to grow by 500,000 mt or 18.5% to 3.2 mmt.
The most bullish of forecasts is seen in the canola data, with the attached chart pointing to a year-over-year drop in ending stocks for both 2016/17 and 2017/18 based on current estimates. An increase in expected 2016/17 exports of 500,000 mt to 10.5 mmt resulted in a similar drop in ending stocks to 600,000 mt, given current Statistics Canada estimates. This would result in a 70.2% drop in ending stocks from the 2.016 mmt estimate for 2015/16, as seen by the brown bar, which is the largest year-over-year reduction in ending stocks seen across the selected crops. Despite a forecast for a record crop to be harvested from a record planted acreage, which at this time is questionable, ending stocks are expected to fall a further 41.7% to 350,000 mt in 2017/18, which would be the lowest level since 1994 and represents less than 2% of forecast annual demand.
With stocks expected to increase in 2016/17 relative to the previous crop year, ending stocks of lentils, peas, soybeans, barley and durum are all expected to contract over the upcoming 2017/18 crop year, while early estimates show wheat stocks remaining steady. Oat stocks remain an exception, with an expected 20% increase in oat acres and flat exports and domestic demand expected to result in a 38.5% increase in ending stocks in the upcoming year.
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