Canada Markets

Wheat markets didn't have a great deal to celebrate today but closed higher just the same, with Chicago soft red winter wheat ending 12 1/4 cents higher (March delivery), Minneapolis hard red spring wheat ending 13 3/4 cents higher and Kansas City hard red winter wheat ending 18 1/2 cents higher.

Ending stocks for both the United States and for the global market were increased, above expectations. U.S. ending stocks for 2015/16 were reported at 941 million bushels (25.6 million metric tons), above pre-report estimates, 25% above year-ago volumes and the largest carryout since 2009/10.

The USDA also once again reported a record global carryout, pegged at 232.04 mmt for 2015/16. Note that this carryout is indicated on the attached chart by the difference in the blue bars (total global supplies) and the red bars (total global demand). This represents 32.4% of annual global use, which is the highest stocks/use ratio calculated in 14 years, since the 2001/2002 crop year. Indicated on the attached chart by the black line, this ratio bottomed at 20.8% in 2007/08 and has trended higher since.

Not shown on the chart, but of interest, is Canada's contribution to global ending stocks. The current forecast of a 4.8 mmt carryout for 2015/16 all-wheat stocks by Agriculture and Agri-Food Canada would account for just 2.1% of global ending stocks, the smallest share of global stocks in the years chosen since 1980. Since 1980/81, the highest Canadian share of the global carryout amounted to 8.6% in 1981/82, while this number has been in decline over each decade. Between 1980/81 through 1989/90, Canada's ending stocks averaged 6% of global stocks. This fell to an average of 4.9% in 1990/91 to 1999/2000, 4.3% in 2000/01 to 2009/10 and so far this decade, has averaged 3.4%.

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