Ahead of Statistics Canada's Feb. 5 release of the Stocks of principal field crops report, the attached chart calculates Dec. 31 stocks based on current government estimates of grain supplies, a pro-rated volume of Agriculture and Agri-Food Canada's import forecast and a combination of Statistics Canada and Canadian Grain Commission reported disappearance in either export channels or domestic markets.
The elephant in the room ahead of this report is canola stocks, given the recent reduction in Statistics Canada's production estimate and the current pace of movement. As seen on the attached chart, the estimate for canola's Dec. 31 stocks is pegged at 12.4 million metric tons, which compares to 15.9 mmt this time last year and the five-year average of 14.4 mmt.
The significance of this calculation is seen when one considers the historical disappearance during the final seven months of the crop year, In 2019-20, this volume totaled 12.7 mmt, above the current estimate of Dec. 31 stocks, while the five-year average is 11.6 mmt a pace that would result in an 800,000 mt carryout, or the lowest in eight years.
The calculation for wheat (excluding durum) results in Dec. 31 stocks of 22.7 mmt, which compares to 21.2 mmt estimate for Dec. 31, 2019 and the five-year average of 19.1 mmt. The January-through-July disappearance in 2019-20 is calculated at 16.425 mmt and the five-year average is 14.4 mmt. While the pace of disappearance achieved in 2019-20 would lead to a year-over-year increase in wheat stocks this crop year, the current pace of movement is well-ahead of last year and the USDA is painting an even greater potential for Canada's exports over the balance of the crop year.
Durum stocks for Dec. 31 are calculated at 4.682 mmt, only slightly higher than the same date last year and below the five-year average of 5 mmt.
In 2019-20, durum disappearance from January through July totaled 3.924 mmt, a pace of movement that would result in ending stocks below 1 mmt and very similar to last year's ending stocks of 737,000 mt, as opposed to AAFC's current 1.1 mmt forecast. Stocks could tighten even further as the current pace of exports is ahead of the pace realized in 2019-20.
Lentil data will also be watched closely. The study calculates Dec. 31 stocks of lentils at 1.874 mmt, which compares to 2.4 mmt for December 2019 and the five-year average of 1.946 mmt. The 2019-20 January-to-July disappearance for lentils totaled 2.2 mmt, signaling a tight stock situation given current estimates.
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