Canada Markets

Canary Seed Stocks to Remain Tight in 2013/14

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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This canary seed chart measures production, total supply and carry-out stocks (black line) against the left-hand y-axis. The stocks/use ratio (blue line) is measured against the right-hand y-axis. 2013/14 data is based on the recent Statistics Canada forecast acreage along with Agriculture and Agri-Food Canada's yield forecast and seeded acres to harvested acres projection (DTN graphic by Nick Scalise).

The March seeding intentions report recently released by Statistics Canada resulted in a surprise in the estimated acres for canary seed on the Prairies. At 190,000 seeded acres forecast for 2013, this would be a 36.7% drop from the 300,000 acres seeded in 2012 and the lowest seeded acres found on Statistics Canada's tables which go back as far as 1986.

Canary seed is forecast to end the 2012/13 crop year with extremely tight stocks of 5,000 metric tonnes and a tight stocks-to-use ratio of 4%. This would suggest that little more than bin bottoms will be found by the end of July.

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Projecting forward using the lower acreage of 190,000 acres along with Agriculture and Agri-Food Canada's harvested acre percentage of 96.7% and AAFC's forecast yield of 19.3 bushels per acre, which is equal to the 2012/12 estimated yield, we end with a production of just 80,000 metric tonnes. Total supplies would become 85,000 mt with the 5,000 mt carry-in stocks from 2012/13. The assumption is made that the 5,000 mt carry-out stocks from 2012/13 is the lowest possible draw-down in stocks, which will leave 2013/14 carry-out stocks unchanged, with the stocks/use ratio increased to 6%.

With just 80,000 mt of available supplies in this analysis, total use will have to be rationed during the crop year. Total use (exports plus domestic consumption) is estimated to have averaged 157,000 mt annually over the past three years, a stark indication of the shortfall in available supplies that may occur in the upcoming year, with Canada relied upon to supply more than 80% of the supplies in the global market.

Like all other crops on the Prairies, seeded acres of canary seed could be further affected by the delayed start to spring seeding on the Prairies and potential shifts in acres that may occur. Time will tell just how producers will react to this scenario once seeding begins. With days to maturity required being slightly higher than that of wheat, it's doubtful that the shift will be towards canary seed.

Indications for old crop canary seed remain in the 27 to 28 cents/lb range, up from 24 cents last fall. New crop contracts are in the 26 to 26 1/2 cents range, but price should be well supported at this level.

Cliff Jamieson can be reached at cliff.jamieson@telventdtn.com

(AG)

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