Canada Markets

This year's record crop combined with the winter's logistical challenges on the prairies has resulted in a significant increase in grain stocks as of March 31 in Canada, according to this week's release by Statistics Canada. Overall stocks of grain as of March 31 were reported at 48.7 million metric tonnes, up 13.9 mmt or 39.8% from the March 31 inventories reported in 2013.

Of this volume, 40.3 mmt, or 82.8%, was situated in on-farm storage, based on the March survey of 11,500 producers. The Prairie Provinces of Alberta, Saskatchewan and Manitoba are carrying the lion's share of this inventory. Stats Canada tables indicate that 33.7 mmt of the grains followed are situated in prairie grain bins, which reflects 83.6% of the farm stored grain and 69.2% of the total Canadian stocks reported.

The attached chart indicates the volume of grain reported to be on farm as of March 31 for the three Prairie Provinces. Given the reporting of selected grains, it's easy to see that Saskatchewan is carrying the bulk of the prairie stocks. Of the 33.7 mmt of prairie grain situated on farm, Saskatchewan farms are suggested to be sitting on 18.1 mmt, or approximately 54% of the stocks. Manitoba is seen holding 14% of the grain while Alberta producers are carrying 32.6% of the inventory.

This has implications for policy makers. In the past four shipping weeks, Weeks 35 to Week 38, Canadian Grain Commission data suggests that primary elevator shipments from Saskatchewan has averaged approximately 47% of the prairie shipments, while sitting on 54% of the stocks as of March 31. Pressure on railways could entice them to cherry-pick stocks closest to port in order to turn cars around quicker and avoid the $100,000-per-day fine which is threatened by the federal government for failure to meet weekly targets.

This is perhaps just one reason why the current Bill C-30, currently awaiting approval by the Canadian Senate, can fail prairie producers and has been referred to as a good "first step" by some industry groups. As the legislation stands, railways do not have corridor-specific targets and can focus on what moves quickly with the sole focus on railcar turn-around time. A Calgary Herald interview with Wade Sobkowich, executive director with the Western Grain Elevator Association, suggests that cars are still not being spotted for U.S. movement. Railways continue to choose which customers are satisfied, in addition to which producers receive shipping.

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

Follow Cliff Jamieson on Twitter @CliffJamieson

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