Agriculture and Agri-Food Canada's January estimates attempted to bring crop demand into line with the current pace of movement, while releasing its first estimates for the 2021-22 crop year.
Summary data shows a large increase in exports of Canada's main grain and oilseed crops since the December estimates released a month ago, with a move from 47.670 million metric tons to 50 mmt this month, with significant upward revisions shown for the country's largest crops. A minor downward revision was made for exports of pulse and special crops of 90,000 metric tons, while overall exports increased by 2.240 mmt.
Partially offsetting this increase in export demand was a downward revision in domestic demand of 1.344 mmt, with stocks of all principal field crops falling by 700,000 mt from last month's estimate to 13.420 mmt, also down 874,000 mt or 6% from 2019-20.
This month's report saw an upward revision in 2020-21 wheat exports (excluding durum) from 19.650 mmt to 21 mmt. This brings AAFC into line with recent USDA estimates for Canada, with the USDA's latest estimate showing Canada's all-wheat exports at 26.5 mmt. If achieved, the 21 mmt would reflect a record level of wheat exports and the first time in excess of 20 mmt. As of week 24, licensed exports are roughly 472,000 behind the pace needed to reach this forecast, although unlicensed exports and the export of flour should make up for this difference.
Offsetting this favorable export disappearance is a downward revision of 950,000 mt, with the largest revision in the feed, waste, and dockage column. Ending stocks were revised 400,000 mt lower, to 5.3 mmt this month, still up from the 4.763 mmt carryout in 2019-20. The Dec. 31 stocks estimates will be watched closely to verify this.
AAFC's forecast for 2021-22 shows stocks poised to fall by 300,000 mt to 5 mmt. While the Jan. 2018 and Jan. 2019 January forecasts for the following crop year over-stated stocks, the attached chart shows us that on average over the past five years, final stocks estimates for wheat (excluding durum), averaged 702,000 mt or 25.2% higher than the first January forecast for the crop year.
Durum exports for 2020-21 were revised 80,000 mt higher to 5.4 mmt, a third consecutive upward revision that also represents a record level. As of week 24, exports through licensed facilities were 61,600 mt ahead of the steady pace to reach this forecast. Ending stocks were revised 150,000 mt lower from 1.1 mmt to 950,000 mt, which represents a slight increase from the 737,000 mt carried out of 2019-20. Canada is viewed as the only major exporter to see stocks increase in 2020-21, although it is a modest increase at best.
Looking ahead to 2022-22, stocks are forecast to grow to 1.3 mmt. As seen on the attached chart, AAFC's first estimate for the following crop year tends to overstate stocks by a modest amount averaging 165,000 mt or 7.9%.
The other large revisions in demand were seen for canola this month. Exports for 2020-21 were revised from 10.2 mmt to 10.9 mmt, an upward revision long overdue given the current pace of movement. It is interesting to note that the current pace of movement shows exports close to 800,000 mt ahead of the steady pace needed to reach the 10.9 mmt released this week, with exports pointing closer to a 12 mmt program, although supplies will be a limiting factor.
The interesting part of this forecast is an offsetting downward revision in domestic crush from 10.2 mmt in December to 9.5 mmt in January, which allows ending stocks to be left unchanged at 1.2 mmt. While there may be a desperate need to ration stocks this crop year, we are not seeing it yet. Today, Statistics Canada released December crush data to show 904,577 mt crushed, down for a second month but higher than 900,000 mt for only the third time. Cumulative crush is reported at 4.370 mmt, up 0.6% from last year's record pace.
The canola forecast for 2021-22 points to higher seeded acres, a slightly higher average yield, and slightly lower exports, with ending stocks forecast to fall by 200,000 mt to 1 mmt next crop year. As seen on the attached chart, the first January forecast shows ending stocks understated in each of the past five years, with final ending stocks averaging 1 mmt or 66.8% higher than the initial forecast.
This month, AAFC increased its forecast for both export and feed demand for barley by 200,000 mt, while reduction ending stocks by 200,000 mt to 1 mmt, only marginally higher than the previous crop year.
Estimates for 2020-21 stocks of corn, oats, soybeans, and dry peas were left unchanged this month, while stocks of flax and lentils were revised marginally higher.
Looking at the attached chart, along with canola and wheat, ending stocks of corn and soybeans for the following crop year tend to be understated on average in the January report. Stocks of durum, barley, oats, flax, peas, and lentils tend to be overstated in the January report.
The most consistency is seen in the forecasts for canola and soybeans, with the January stocks forecast for the following crop year starting the following August (September for soybeans) understated in each of the past five years, while the estimates for peas and lentils were overstated in each of the past five years.
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