Canada Markets

Statistics Canada revealed their ideas for July 31 ending stocks of grain, which provides some closure for the 2018-19 crop year while acting as a starting point for 2019-20, appearing as beginning stocks. Statistics Canada states that data is subject to revision for a period of two years, which is exactly what was seen Friday in data released for wheat.

Canada's all-wheat stocks were reported at 6.184 million metric tons (mmt), down 4.6% from 2017-18, with a year-over year increase seen in durum stocks along with a year-over-year drop in wheat (excluding durum) stocks, while upward revisions were made to Canada's wheat production and stocks estimates for the past two crop years.

Durum stocks were up 13.5% from 2017-18 to 1.619 mmt, close to AAFC's forecast of 1.6 mmt and 14.5% higher than the five-year average. Stocks as a percent of use or disappearance is calculated at 29%, the highest seen in five years.

Wheat stocks (excluding durum) were estimated at 4.565 mmt, well above the most recent AAFC estimate of 3.6 mmt. While this volume is down 9.7% from 2017-18, it is down an even higher 21.3% from the five-year average. It is important to note that due to recent upward revisions in production for the past two years, wheat stocks for 2016-17 were revised 75,000 metric tons (mt) higher and wheat stocks for 2017-18 were revised 570,000 mt higher in order to arrive at Friday's results.

Canada's wheat stocks (excluding durum) as a percentage of use is calculated at 16.9%, the lowest seen in three years. It is interesting to note that farm stocks of wheat are reported down 45.5% to 1.389 mmt, the smallest farm carryout seen in nine years. Statistics Canada shows Saskatchewan farm stocks at 75,000 mt, Manitoba's at 150,000 mt and Alberta farm stocks at 1 mmt. The volume held on Saskatchewan farms is near the lowest seen in records dating back to 1981, although Statistics Canada reports a zero for farm stock for July 1984. The five-year average is 1.272 mmt. Meanwhile the 1 mmt held on Alberta farms is slightly higher than the five-year average of 948,000 mt.

Canola stocks were estimated at a record 3.873 mmt, up 55% from the previous July and 68.2% higher than the five-year average. This was slightly higher than AAFC's August estimate of 3.7 mmt, while there has been a wide range of estimates released by various sources over the crop year. Canola's stocks as a percentage of total use or disappearance is calculated at a bearish 20.3%, up from 12.2% last year and 6.6% two years ago, the highest in nine years.

Lost exports due to China's ban on canola imports was largely behind the data presented for canola, with exports falling 1.4 mmt year over year. Statistics Canada's updated supply and demand tables show domestic use exceeding exports by 333,200 mt over the past crop year, the first time this has happened since the 2002-03 crop year.

Of the 1.374 mmt increase in canola stocks, farm stocks increased by 976,000 mt and commercial stocks increased by 398,400 mt. Across the Prairie provinces, producers in Manitoba are holding a record 500,000 mt, up 350,000 mt year over year, producers in Saskatchewan are holding 650,000 mt, up only 100,000 mt year over year and the largest in five years and Alberta producers are holding a record 1.435 mmt, up 510,000 mt from 2017-18.

Friday's close saw the November contract end $2.50/mt lower at $442.80/mt, printing its fourth and largest weekly loss, while moving closer to a test of July lows.

Canada's barley stocks were estimated at 893,000 mt, down 28.2% from 2017-18, 44% below the five-year average and to a record low. Despite an upward revision to the March 31 stocks of 189,000 mt, the March-July disappearance is calculated at 1.784 mmt, 16.9% below the 2017-18 disappearance and 24% below the five-year average, with increased use of wheat and corn imports used to offset the tight barley stocks. Total estimated stocks represent 10.2% of annual use or disappearance, down from 14.1% in 2017-18 and 25.8% in 2016-17.

Oat stocks fell 46.8% year over year to 414,000 mt, 50.9% below the five-year average and the lowest July 31 stocks seen since 2001/02 and the third-lowest stocks in data going back to 1980-81. The stocks/use ratio is calculated at 10.9%, down from 21.2% reported in the year prior.

Dry pea stocks were reported to fall by 40.1% to 388,000 mt, while 9.1% below the five-year average. This is above the 200,000 mt estimate released by AAFC in August. As well, lentil stocks were estimated at 654,000 mt, down 25.1% from 2017-18. This is higher than AAFC's August 575,000 mt estimate, while 35.7% higher than the five-year average.

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

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(CZ)

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