Canada Markets

The volume of canola carried into the 2014/15 crop year was 2.3631 million metric tonnes, of which 927,100 metric tonnes was reported as commercial stocks while the balance was on-farm, according to Statistics Canada data. Total commercial stocks at August 1 are calculated to be 23.6% higher than the five-year average.

Since August 1, 7.8341 mmt have been delivered by producers, roughly 941,000 mt higher than the five-year average for the first 25 weeks, according to Canadian Grain Commission data. Weak exports have also contributed to the build-up in commercial stocks, with just four of the 25 shipping weeks reaching or exceeding the weekly volume needed in order to reach the 9.2 mmt export target. While exports recovered to 198,900 mt in week 25, the weekly average volume in the four weeks prior to week 25 was only 66,900 mt, well below the steady volume needed to achieve the current export target.

As a result, commercial canola stocks reached a high of 1.4638 mmt in week 24, dipping slightly to 1.3845 mmt in week 25, a volume which is 38% higher than year-ago commercial stocks and a similar percentage over the five year average.

Comfortable stocks have allowed canola bids to remain soft, with the average Prairie-wide basis for February calculated at $24.85/mt under the May future, based on available internet bids. This translates into an average prairie bid of $422.45/mt or $9.58/bu based on today's close.

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

Follow Cliff Jamieson on Twitter @CliffJamieson

(CZ)

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