Over recent weeks, Canadian Grain Commission data has pointed to heavy commercial stocks of canola as a bearish feature weighing on the market. As of week 24, producer deliveries into licensed facilities are reported at 9.4157 million metric tons since Aug. 1 or the start of the crop year, up 546,000 metric tons or 6.2% from the same period in the previous crop year. Meanwhile, licensed exports have fallen 8.8% year-over-year and, thanks to strong domestic disappearance, total disappearance (crush plus exports) has increased 2.7% from the same period in 2018-19.
The Canadian Grain Commission reported the week 24 canola stocks, or as of the week ending Jan. 19, 2020, at 1.4305 mmt, down 85,100 metric tons from the previous week but remaining high given the pace of demand. This is the highest week 24 stocks seen in four years and 7% higher than the five-year average for this week.
This volume is up 355,600 mt, or 33%, from the same week in 2018-19, prior to news breaking in early March of China's ban on Canadian canola imports. The attached chart shows that in 2018-19, a high was reached in week 14 of 1.4937 mmt (brown line), while the trend was lower over the course of the crop year. The blue line shows the current crop year high of 1.5843 mmt as of week 18, while stocks have remained elevated and are holding above a low of 1.3 mmt over this period.
On Feb. 5, Statistics Canada will release its first stocks report for the crop year, as of Dec. 31. The agency's ideas of what is in farm storage will be of particular interest to market watchers.
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Cliff Jamieson can be reached at email@example.com
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