The Feb. 5 release of Canada's grain stocks estimates was watched closely, as it is the first look at the 2019-20 crop year that takes into account the unharvested crop due to challenging conditions faced in the fall of 2019. While the November production estimates included acres that producers intended to harvest, including spring harvest, the Dec. 31 stocks report released on Feb. 5 included only grain currently in storage.
The report can be summarized by a year-over-year increase in stocks of barley, oats and dry peas, while stocks of wheat, canola, corn, lentils and soybeans were lower.
Lower carry-in stocks of Canada's all-wheat (wheat and durum) in 2019-20 contributed to a year-over-year drop of 0.5% for all-wheat stocks as of Dec. 31. Stocks were reported at 24.982 million metric tons, slightly higher than the average of pre-report estimates and 3.7% higher than the five-year average for this date. Farm stocks of wheat increased to 20.8 mmt, up 1.5% and the highest level of farm stocks in five years, while commercial stocks of wheat dipped 9.6% to the lowest level in three years.
Wheat stocks, excluding durum, increased by 4.3% to 20.467 mmt, the highest December stocks reported in five years and 6.9% higher than the five-year average. This estimate was only slightly higher than the average of pre-report estimates. As of the final crop reports released by the three prairie provinces, roughly 7% of the country's wheat acres remained to be harvested with the potential for stocks to increase further in spring.
Statistics Canada lowered the July 2019 carryout of wheat by 318,000 mt in order to accommodate the December volumes found. As found on the attached chart, December stocks represent 64.6% of total estimated crop year supplies, up from 61.7% as of December 2018 and the five-year average of 62.8%, at a time when exports continue to lag. Projecting forward to 2019-20 ending stocks, based on 2018-19 January-through-July disappearance, stocks would be roughly 5.5 mmt, 500,000 mt higher than the AAFC's most recent January estimates.
Durum stocks are estimated at 4.516 mmt, higher than the 4.2 mmt pre-report estimate, down 17.6% from Dec. 2018 and 8.6% below the five-year average for this date. Durum stocks as of July 31 2019 were revised 173,000 mt higher in this month's release. At a time where current exports are well ahead of the previous year's pace, the attached chart shows Dec. 31 stocks accounting for 66.2% of 2019-20 crop year supplies, well below the 75.6% reported in Dec. 2018 and the five-year average of 68.1%.
Projecting forward, ending stocks for 2019-20 would be 950,000 mt based on the 2018-19 January-through-July disappearance, higher than the current AAFC estimate of 850,000 mt. At the same time, disappearance in the first half of the crop year were well ahead of last year's pace which could further tighten stocks should it continue.
Canola stocks were reported at 14.271 mmt, down 2.4% from last year with a significant acreage yet to be harvested. This is also 4.8% higher than the five-year average and just under the 14.4 mmt average of pre-report estimates. The range of estimates was wide, from 13.7 mmt to 15.2 mmt, which indicates that it will take some time in order to obtain a consensus. Canola stocks as a percentage of crop year supplies is calculated at 63.2%, close to the 63.6% calculated in 2018-19 and the five-year average of 63%. Projecting forward to 2019-20 ending stocks based on 2018-19 disappearance, the current AAFC estimate of 3.5 mmt remains in line with the projected volume.
Canada's barley stocks were estimated at 5.959 mmt, up 1 mmt or 20.6% from 2018 and 4.3% higher than the five-year average. This is below the pre-report estimate of 6.3 mmt. Due to both higher yields and harvested acres realized in 2019, crop year supplies are at the highest level seen in six years, while December stocks represent just 52.9% of estimated supplies, below the five-year average at 58.3% as of Dec. 31. Current projections based on 2018-19 Jan-July disappearance support the current 1.8 mmt carryout estimated by AAFC for 2019-20.
Oat stocks were estimated at 2.671 mmt up 11% from Dec. 2018 and 3.8% higher than the five-year average. Like barley, higher yields and seeded acres in 2019 resulted in estimated supplies reaching the highest level in 11 years, while Dec. 31 stocks represent 58.6% of this volume, below the five-year average of 61%. Based on the Jan-July disappearance in 2018, ending stocks would project forward to 662,000 mt, slightly higher than the current AAFC estimate of 650,000 mt.
Soybean stocks were reported at 3.874 mt, down 9.4% from Dec. 2018 and 2.6% higher than the five-year average, while the lowest in three years. As seen on the attached chart, the estimated stocks represent 56.5% of total estimated supplies, above the five-year average of 48.3%. The current slow pace of exports supports the current 400,000 mt crop year carryout as forecast by AAFC.
Corn stocks fell to 10.686 mmt as of Dec. 31, the lowest volume reported in five years, down 8.1% from the same date in 2018 and 5.8% below the five-year average. Historical January-through-August disappearance would point to the potential for ending stocks to fall below the current AAFC estimate of 1.8 mmt in 2019-20, although the slow pace of exports may minimize chances of this happening.
Stocks of peas increased to 2.632 mmt, up 3.2% from 2018, while lentil stocks fell 14.9% to 1.8 mmt. Ending stocks projections for 2019-20 are in line with current government estimates for both crops.
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