Statistics Canada released its July 31 stocks estimates showing stocks of Principal field crops (excluding corn and soybeans) falling by 4.160 million metric tons, or 28.7%, to 10.318 mmt as of July 31. Of this drop, 70% was realized in the estimated volume held on farm.
Wheat was one crop that bucked the overall trend of tighter stocks, with Canada's all-wheat estimated at 5.705 mmt, up 3.7% from the previous crop-year while 6.1% below the five-year average. The August Agriculture and Agri-Food Canada estimate released on Aug. 20 showed a 4.933 mmt all-wheat carryout, while the USDA was estimating Canada's carryout at 3.83 mmt. This is despite overall exports reported up 10% year-over-year to 26.4 mmt. The government found a year-over-year increase in commercial stocks off-setting a modest decline in farm stocks.
The majority of this increase in stocks was found in the wheat stocks estimate (excluding durum). Stocks were estimated at 4.954 mmt, up 4% from July 31 2020, the highest in three years and 5.8% higher than the five-year average. This is a bearish number that was unexpected. Farm stocks are estimated at 2.089 mmt, up 4.24% from the previous year and the largest estimated volume in three years. Commercial stocks rose 3.8% from one year ago, while the largest commercial volume seen in four years. Commercial stocks at 2.865 mmt compares to the CGC's week 52 estimate of 2.459 mmt, which bears watching.
One difference between AAFC and Statistics Canada's estimates is seen in the domestic use estimate. While AAFC has forecast domestic use at 8.2 mmt, Statistics Canada tables show 7.886 mmt. Demand is seen tapering in the last quarter of the crop year, with the total March-July disappearance at 8.524 mmt, down 20.4% from the same period last crop year.
The durum estimate was close to expectations. Statistics Canada estimated durum stocks at 752,000 metric tons, up 2% from last year while 46% below the five-year average. The government's latest estimate was 654,000 mt. The current estimate shows stocks close to the lowest level seen since 1985-86. Commercial stocks rose year-over-year to 675,000 mt, while farm stocks fell sharply to 77,000 mt, which is the tightest farm stocks seen since July 2008.
One of the most watched estimates in today's report was the canola estimate. Some expressed surprise at the 1.767 mmt estimate released today, which is down 48.6% from one year ago and 36.6% below the five-year average. The government's unofficial estimates show 700,000 mt, while producers faced all-time high cash bids over the crop year which would lead one to believe stocks would be much tighter than reported.
If we go back in time, Statistics Canada's production estimates released on Aug. 30 included revisions to the 2020 crop of 765,000 mt and an additional 305,000 mt for 2019, an increase of more than 1 mmt, which will not show up in AAFC's estimates until the September report is released.
Canola demand weakened in the last quarter of the crop year, with March-July disappearance of 5.972 mmt, down 20% from last crop year and 10.7% below the five-year average, a case of high prices curing high prices.
Barley stocks were reported at 711,100 mt, above the 500,000 mt reported in unofficial government estimates but still the lowest on record. This volume is down 26% from last year and is 46.4% below the five-year average. Stocks are reported at a tight 6.3% of annual use, with a shift in demand seen with feed use falling 727,800 mt year-over-year, while total exports rose by 1.619 mmt to 4.5716 mmt.
Demand slowed in the later months of the crop year, with the March-July disappearance reported at 2.295 mmt, down 10.8% from last year while 1.9% higher than the five-year average as supplies tightened.
Oat stocks were reported at 659,000 mt, up 55% from the previous crop year and 0.7% higher than the five-year average. This volume is the highest estimated volume in three years, well-above the 350,000 mt estimate released by AAFC in August. This increase is seen despite a 12.2% increase in exports to 2.9 mmt, the largest volume exported on record.
The government agency found 479,000 mt of dry peas as of July 31, up 105.6% from the previous crop year and 43.7% higher than the five-year average, the highest carryout seen in three years. At 851,600 mt, domestic use increased 23.6% to the highest level seen in five years, while Statistics Canada reports exports slipping by 3.5%, or 129,200 mt, but still 7.5% higher than the five-year average.
According to Statistics Canada, July 31 stocks of lentils are seen at 406,000 mt, up 94.3% from last year and down 12.7% from the five-year average.
The attached chart shows the estimated 2021-22 crop year supplies (ignoring crop imports) when Statistics Canada's Aug. 30 production estimates are added to today's July 31 stocks report, which in turn become beginning stocks for 2021-22. Across the selected crops, supplies are down 26.2 mmt from the 2020-21 crop year, with the largest year-over-year change seen for all wheat at 12.1 mmt. Canola supplies are to fall by 6.5 mmt, based on current estimates.
Cliff Jamieson can be reached at email@example.com
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