Agriculture and Agri-Food Canada's December release of the Canada: Outlook for Principal Field Crops included the revised production estimates from the recent Statistics Canada Production of Principal Field Crop report. The most recent data has led to total production data estimates for all principal field crops that is just 101,000 metric tons higher than achieved in 2016/17, but 4.6 million metric tons higher than the November estimate at 93.148 mmt.
As a result, estimates for both domestic demand and exports have been revised higher to account for this extra production, while ending stocks have been revised higher this month from the year-over-year reduction in stocks reported in the November report to a sharply higher 15.740 mmt. This is up roughly 1 mmt from the 2016/17 ending stocks estimate and 2.8 mmt higher than the estimate released in November.
The attached graphic points to the largest swings in forecast ending stocks from 2016/17 to 2017/18 (blue bars to grey bars), as well as from the earlier November estimates (brown bars) to the revised December estimates (grey bars) for selected grains.
Ending stocks for durum were revised 300,000 mt higher this month to 1.1 mmt, but remains 41% lower than 2016/17. Canada's export potential was increased by 200,000 mt this month to 4.8 mmt, while domestic demand was also revised higher. Exports at 4.8 mmt would be the highest level realized in three years, while the most recent week 19 data shows exports behind the pace needed to reach this target. Over the past five years, an average of 35.2% of total crop year exports has been shipped as of week 19, while this historical pace would suggest crop year exports of roughly 4 mmt. The slowest pace of movement was seen in 2016/17, when just 28.4% of crop year shipments were realized as of week 19, a pace of movement that would point to exports of roughly 4.9 mmt, consistent with AAFC's findings.
Ending stocks of wheat were revised 1 mmt higher, to 5 mmt, also made possible given a 900,000 mt hike in exports to 17.2 mmt and hike in domestic feed demand, with exports expected well above the 15.6 mmt achieved in 2016/17. This would be the highest wheat exports realized in three years. Week 19 statistics point to movement behind the steady pace needed to reach this higher target. An average 33.9% of crop year exports are realized through licensed facilities in the first 19 weeks of the crop year over the past five years, while this average pace of movement would suggest total exports close to the 17.2-mmt target set by AAFC.
The much-higher-than-expected canola production has led to upward revisions to canola demand projections and ending stocks. Ending stocks were revised 1 mmt higher, to 2 mmt, which is up 48% from the 2016/17 crop year. Demand was revised higher, with the export forecast hiked by 500,000 mt to a record 11.5 mmt, while the domestic crush estimate was revised 100,000 mt higher, to 9.1 mmt. Week 19 statistics shows exports slightly behind the pace needed to reach this new target. As well, an average of 35% of total crop year exports have been realized in the first 19 weeks of the crop year over the past five years, a pace which would point to exports closer to 11 mmt, which could suggest an even higher climb for ending stocks, especially given ICE Canada commentary pointing to concerns of slowing exports.
A larger barley crop is expected to lead to increased exports, domestic feed demand as well as an upward hike in expected ending stocks for 2017/18. Export demand was revised 200,000 mt higher, to 2.450 mmt, while domestic demand was revised 136,000 mt higher, to 6.1 mmt. Ending stocks were revised 300,000 mt higher, to 1.550 mmt, down 27% from 2016/17. The current pace of exports would suggest movement could exceed the current projections, although the domestic feed demand may not allow this to happen.
Dry pea production was revised higher in the most recent Statistics Canada release, revised 250,000 mt higher that went straight to the carryout projection, revised by the same volume to 1.2 mmt, which would be the largest stocks on record. Over the past five years, an average of 35% of total crop year exports have been achieved through licensed channels as of Week 19, with the current pace of exports on track to achieve the current 2.4 mmt export target which was left untouched this month.
An increase in the expected lentil crop production in 2017 also led to an increased in ending stocks to 565,000 mt, with export potential left unchanged this month. This will be the largest carryout realized in four years.
Cliff Jamieson can be reached at email@example.com
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