Based on surveys conducted during March, Statistics Canada released its estimates to point to tighter stocks of grain overall. as of March 31, with a year-over-year drop in farm stocks a common theme for many grains. Statistics Canada summarized that stocks of all-wheat, barley, corn, peas and lentils were lower, while stocks of canola, soybeans and durum rose over the past year.
Statistics Canada estimated Canada's all-wheat stocks at 15.694 million metric tons, down 4.3% from March 31, 2018, 11% below the five-year average and the lowest reported in three years.
Canada's wheat (excluding durum) stocks were estimated at 11.779 mmt, down 9.9% from 2018, 17.7% below the five-year average and close to the lowest March 13 stocks seen during the past 10 years. Canada's pace of exports clearly shows in the data, with December-through-March disappearance calculated at 6.126 mmt, up 12.4% from 2017-18 while 11.8% higher than the five-year average. When the historic pace of disappearance is considered for the balance of the crop year (April-through-July), July 31 stocks would project to 3.2 mmt based on 2017-18 disappearance while the five-year average disappearance would project to 3.1 mmt, below AAFC's current estimate of 4 mmt and would represent historic lows, if not a record low.
Durum stocks were estimated at 3.915 mmt, up 18% from March 2018, 17.7% higher than the five-year average and the highest stocks reported in two years. While Canada's all-wheat stocks were reported lower due to a drop in farm stocks, durum stocks increased year-over-year both on-farm and in commercial positions. It is interesting to note that January-through-March disappearance is reported to be equal to the same period in 2017-18, but below the five-year average, while both the 2017-18 and five-year average disappearance in the April-through-July period would project to ending stocks of 2 mmt based on March 31 stocks, equal to the current estimate released by AAFC.
It was no surprise that canola stocks, as of March 31, were estimated at a record 10.019 mmt, up 10.5% from March 2018 and up 15.4% from the five-year average. When January-through-March data reported by the CGC is deducted from the Dec. 31 stocks estimate (both crush and exports) you arrive at the same level. The Statistics Canada report points to swelling farm stocks while commercial stocks have dropped, as one would expect, given the trade challenges faced. January-through-March disappearance lags both last year and the five-year average at 4.5 mmt, while historic April-through-July disappearance would project to 2018-19 ending stocks in the 3.5 mmt to 3.6 mmt range. This is consistent with Agriculture and Agri-Food Canada's current estimate of 3.5 mmt. The pace of exports will be key, with an AAFC official on the record stating that exports are poised to slow further over the balance of the crop year, which could lead to an increasingly bearish situation.
Statistics Canada estimated the country's soybean stocks at a record 2.913 mmt, up 4.3% from 2018 and 44.2% higher than the five-year average. Slowing exports since the end of December have had a bearish effect on stocks, with January-through-March disappearance down 31% from 2017-18 and 25% below the five-year average. Unlike canola however, the March 31 outcome was the result of a year-over-year drop in farm stocks along with a corresponding hike in commercial stocks. Based on historical movement in the April-through-July period, ending stocks are set to grow to levels beyond the current AAFC estimate of 550,000 mt and the 650,000 mt carried out of 2017-18. Based on last year's pace of disappearance, stocks would grow to 770,000 mt while the five-year average disappearance would see stocks swell to 1.3 mmt, both representing record levels.
A drop in farm stocks is reported for both barley and oats as of March 31. Barley stocks were reported to fall by 26.6% over the past year to 2.488 mmt, a record low for the month of March. This comes as a surprise, as the reported December stocks, less licensed exports, less estimated domestic disappearance equals roughly 3.9 mmt, suggesting that domestic disappearance is higher than estimated or they are simply correcting for the level of farm stocks. This data paves the way for a bullish outcome for barley over the balance of the crop year. Based on the 2.1 mmt of disappearance in the April-through-July period of 2017-18 and the five-year average of 2.3 mmt, stocks in 2018-19 are set to plunge to a range of 150,000 mt to 350,000 mt if you accept current estimates, or record lows.
Canada's oat stocks fell by 33.4% from last year and 27% below the five-year average to 1.401 mmt, the lowest March stocks reported since March 2003, or 16 years. Once again this was due to a sharp 38.6% drop in farm stocks. January-through-March disappearance is up 17% from 2017-18 and 22% higher than the five-year average. Like barley, a historical pace of movement would lead to oat stocks falling to tight levels by the end of July, with the 2017-18 disappearance calculated at 1.325 mmt. Oat stocks will be rationed over the balance of the crop year if current estimates are correct, while end-users pin hopes on the 2019 crop.
Corn stocks were estimated at 8.302 mmt as of March 31, down 5.2% from March 2018 although 6% higher than the five-year average. A drop in on-farm stocks offset an increase in commercial stocks, with 2019 stocks the lowest reported in three years. Statistics Canada data points to January-through-March disappearance being lower than estimated in 2017-18, as well as below the five-year average, which begs further questions. Based on April through July 31 historical disappearance, ending stocks project to 2 to 2.5 mmt, which compares to the current 2 mmt estimated by AAFC.
Dry pea stocks as of March 31 were estimated at 1.679 mmt, down 25.7% from last year, 2.1% below the five-year average and the lowest level in three years. January-through-March disappearance is calculated higher than in 2017-18 and above the five-year average, while the historical pace of disappearance in the April-through-July period would lead to July 31 stocks that are tighter than the current 400,000 mt estimate shown by AAFC.
Lentil stocks as of March 31 were estimated at 1.363 mmt, down 15.4% from March 2018 but still 13.4% higher than the five-year average. When considering both the 2017-18 April-through-July disappearance or the five-year average disappearance for the same period, ending stocks would project to the 625,000 mt to 650,000 mt range, still historically high but below the 873,000 mt carried out of 2017-18 as well as the current 800,000 mt estimate released by AAFC.
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