Canada Markets

February Supply and Demand Tables Indicate Tighter Durum Stocks

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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Agriculture and Agri-Food Canada is forecasting a 1 million metric tonne durum carryout in 2014/15, the lowest since 2007/08. 2015/16 ending stocks are estimated to remain steady. (DTN graphic by Nick Scalise)

Agriculture and Agri-Food Canada's February Canada: Outlook for Principal Field Crops saw Canada's 2014/15 ending stocks of all grains and oilseeds increased by 430,000 metric tonnes or 4% from the January report to 10.920 mmt. This reflects a 35.5% reduction from the 16.937 million metric tonnes carried out of the 2013/14 crop year.

The largest upward revisions were seen in the feed grains, with barley ending stocks reported to increase 250,000 metric tonnes to 850,000 mt and corn's ending stocks forecast to grow 400,000 mt to 1.3 mmt.

One cut made in ending stocks was in durum, largely due to a 181,000 mt reduction in the 2013/14 carryout, as reported in the latest Statistics Canada stocks report. Combined with a small increase reported in 2014/15 domestic demand, the overall impact is a reduction in 2014/15 supplies and a resulting drop of 200,000 mt to the 2014/15 carryout. The carryout for the current crop year is reported at 1 mmt, down 38.7% from the previous crop year.

The attached chart indicates the 1 mmt carryout projected for the current crop year would be the tightest year-end stocks reported since 2008/09 when 809,000 mt was carried out. In Statistics Canada data going back to 1980, ending stocks have fallen below 1 mmt only six times, with the lowest level seen in July 1985 at 524,000 mt.

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Could current year ending stocks be even tighter than seen in this forecast? Looking back to the 2013/14 crop year, December through July disappearance totaled 3.607 mmt, with December stocks reported by Statistics Canada reported at 5.239 mmt and ending stocks at 1.632 mmt. Should disappearance this crop year match last year's pace, this would suggest a much tighter 452,000 mt carryout at the end of July 2015. This is calculated by last year's 3.607 mmt demand subtracted from the December 31 stocks of 4.059 mmt.

2014/15 exports through licensed channels total 2.7375 mmt as of week 27 or the week ending Feb. 8, 17.4% ahead of year-ago levels. While the week 27 exports were only 14,500 mt through licensed elevators, the lowest weekly volume reported this crop year, year-to-date exports remain close to 200,000 mt ahead of the pace needed to achieve the current 4.9 mmt export target. Note that this does not include unlicensed exports to the U.S.

In addition, the industry is better positioned than last year, according to weekly commercial stocks data as of week 27. As of week 27, Canadian commercial stocks totaled 856,500 mt, 253,540 mt higher than year-ago volumes. As well, volumes remain higher in export terminals as compared to year-ago volumes. While country stocks, west coast stocks and inventory at Churchill remain constant to year-ago levels, Thunder Bay inventory is reported to be approximately 87,000 mt higher than year ago stocks while inventory at St Lawrence ports is approximately 177,000 mt higher than year-ago volumes.

Export data to the end of December indicates that export volume to the U.S. is less than 50% of the same period last year (August through December), while substantial gains in volumes have been made to Italy, up 112% or 425,000 mt and Algeria, up 169% or 213,000 mt.


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

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