When Statistics Canada's official acreage estimates, released on April 26, are plugged into Agriculture and Agri-Food Canada's supply and demand estimates, we see where a combination of domestic use and export demand may be revised higher and where the problems lie with current demand estimates.
AAFC forecasts are based on average harvested acre percentages and yields, while basing forecasts for imports, exports and domestic use on available supplies.
This study indicates a potential to revise higher the forecast for exports or domestic use of lentils, oats, corn, wheat and durum based on the forecast's assumptions.
Of the select crops, stocks of dry peas, soybeans, flax, canola and barley are set to fall year-over-year given the revised seeded acre estimate. At the same time, stocks cannot fall by the amount shown on the attached graphic. For example, the 155,000-metric-ton drop in barley stocks based on the revised acres is likely impossible from the all-time low of 300,000 mt currently forecast for 2021-22. As well, the 621,000-mt drop in canola stocks is impossible with stocks for the current crop year forecast at an already low volume of 400,000 mt.
For these crops, watch for AAFC's next report to reduce export and/or domestic use, while stocks will remain tight at the end of the 2022-23 crop year based on the assumptions made in the supply and demand model.
Cliff Jamieson can be reached at email@example.com
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