One recent trade estimate is pointing to a significant year-over-year jump in grain stocks given this winter's poor railway performance and challenges faced in the export of pulses tied to India's import tariffs. Quorum Corporation, a company tasked by government to track grain handling and transportation, has recently revealed to the media an estimate of 12.6 million metric tons for all western grains to be carried out of the 2017/18 crop year at the end of July, above the five-year average of 8.3 mmt. To put this volume into context, Wade Sobkowich of the Western Grain Elevator Association indicates his rule of thumb pegs anticipated carryout at roughly 10% of the size of the crop, or 7.2 mmt based on the estimated 72-mmt crop size in Western Canada. Using this logic, the Quorum estimate points to July 31 stocks that could be 75% higher than once expected.
Despite this forecast, producers have perhaps shown they will not deliver at any cost, with continued dryness seen over many areas of the Prairies along with falling prices keeping grain in the bin. As seen on the attached chart, weekly producer deliveries of all grains into licensed handling facilities on the Prairies has fallen in each of the past four weeks to 715,100 mt in week 49, down 403,000 mt from the previous week and the smallest weekly volume delivered in seven weeks.
Given historical data, this is the smallest weekly volume shipped in this particular week in five years, while 220,860 metric tons or 23.6% below the five-year average for this week.
Cliff Jamieson can be reached at email@example.com
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