Canada Markets

AAFC July Estimates

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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Based on AAFC's July estimates, the blue bars represent the year-over-year change in ending stocks for selected crops as of 2018-19, while the brown bars represent this forecast change for 2019-20, measured in metric tons against the primary vertical axis. The black line with markers represents the 2019-20 stocks-use ratio, as measured against the secondary vertical axis. (DTN graphic by Cliff Jamieson)

Agriculture and Agri-Food Canada's July supply and demand estimates were released, which shows a 748,000-metric-ton boost in exports of all principal field crops for 2018-19 since the June report. This includes an upward revision of 100,000 mt of durum, 200,000 mt of wheat, 100,000 mt of corn, 50,000 mt for both oats and barley and 100,000 mt for both peas and lentils. Domestic demand for all grains was trimmed slightly, while ending stocks for all principal field crops was reduced by 601,000 mt to 14.571 million metric tons, down 849,000 mt or 5.5% from the previous crop year.

Seeded acres for 2019 were adjusted using Statistics Canadas Principal field crop areas report, while estimated yields were only slightly tweaked from the historical averages used to drive early-season forecasts. Total production is estimated at 93.566 mmt, down 1.194 mmt from last month but still higher than the estimated 92.676 mmt produced in the 2018-19 crop year.

Given forecasts for demand for the upcoming year, ending stocks were revised 1.785 mmt lower this month to 15.325 mmt, which reflects a year-over-year increase of 750,000 mt from the current crop year estimate. Stocks of grains and oilseeds are forecast to rise by 550,000 mt, while stocks of pulses and special crops are forecast to rise by 204,000 mt.

The blue bars on the attached chart point to the forecast year-over-year change in 2018-19 ending stocks, measured in metric tons against the primary vertical axis. A drop in the level of ending stocks is forecast for wheat (excluding durum), barley, oats, peas, lentils and corn of the selected grains. The largest year-over-year decline is expected for wheat, with ending stocks forecast to fall by 843,000 mt or 20% to 3.6 mmt in 2018-19, which would be the lowest ending stocks reported since the 2007-08 crop year.

The largest year-over-year increase in 2018-19 stocks is reported for canola, which shows a 1.4 mmt increase in ending stocks to 3.9 mmt, a forecast that AAFC has held on to for a few months but remains a topic for debate.

The brown bars represents the forecast year-over-year change in stocks for 2019-20. Of the selected crops, only canola stocks are forecast to grow larger in both crop years, a cautious view that continues to reflect restricted exports. Forecasts for both lentil and corn stocks are expected to decline in both crop years.

The black line with markers represents the 2019-20 stocks-use ratio calculation. Estimates for soybeans point to a bullish, single-digit stocks/use ratio of 8%, while the most bearish crops according to this calculation would be durum at 19.9%, lentils at 20.9% and canola at 21.4%.

The next Statistics Canada data release is set for Aug. 28 for the crop year's first production estimates followed by the July 31 stocks report due for release on Sept. 6.

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

Follow him on Twitter @Cliff Jamieson

(ES)

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