Thursday's Statistics Canada stocks of principal field crops at Dec. 31 was released, with year-over-year drops seen in the country's largest crops of wheat and canola, which were also perhaps the two crops which were most-watched going into this report.
Canada's all-wheat stocks were reported at 20.682 million metric tons, within the range of estimates reported by Commodity News Service; this was down 19.3% from last year and also down 11.7% from the five-year average. This was the lowest stocks reported since December 2007.
Stocks of wheat excluding durum were reported at 16.458 mmt, down 23.5% from December 2014 and 14.3% below the five-year average. This volume is also the lowest since December 2007. Given current Statistics Canada estimates, implied demand in the August through December period is 4.4% higher than the same period in 2014 and is 16.4% higher than the five-year average. This perhaps speaks to the volume of wheat disappearing in feed channels, with year-to-date licensed exports reported at 2.2% above year-ago levels.
As expected, year-end wheat excluding durum stocks will be at historic lows, given current estimates. The January-through-July 31 disappearance in 2014/2015 totaled 15.4 mmt, while the five-year average is 13.4 mmt, suggesting that ending stocks could be roughly 3 mmt given average disappearance, which is equal to the current AAFC estimate. This would be the lowest carryout seen in Statistics Canada data going back to 1980, while could fall even lower given the current pace of demand. As seen on the attached chart, projections are made for 2015/16 ending stocks based on both the five-year average demand and the 2014/15 demand, which would suggest ending stocks could plunge as low as 1 mmt.
Durum stocks were reported at 4.225 mmt, 3% higher than last year and just almost equal to the five-year average. Implied demand in the first five months is 24.7% below last year and 3.7% below the five-year average. The five-year average disappearance in the January-through-July 31 period is calculated at 2.8 mmt, which indicates the likelihood that ending stocks will grow year-over-year from last year's 982,000 mt. Current AAFC estimates suggest a 1.2 mmt carryout, which could see an upward revision based on today's report.
The amount of canola produced in 2015 has been a much debated issue, with Statistics Canada reporting production at 17.2 mmt in December, well-above the average pre-report estimate of 15.5 mmt. Today's stocks of 12.119 mmt are perhaps supportive of the higher official production estimate, which is down 3.9% from last year and 13.8% above the five-year average. With both crush and exports ahead of last year's pace, implied demand in the first five months of the crop year is 9.6% higher than last year and 14.8% higher than the five-year average. Last year's January-through-July 31 disappearance totaled 10.3 mmt, while year-over-year ending stocks are expected to fall, but could be increased from AAFC's current estimate of 1.750 mmt. The canola market ended lower Thursday, largely due to a further rally in the Canadian dollar.
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Ending stocks of flax were reported at 732,000 mt, up 23.6% from last year and 51.9% above the five-year average. This volume represents a six-year high. Given current estimates for 2015/16 supplies, implied demand in the August through December period is 17.6% below last year although 18% above the five-year average. The January-through-July disappearance in the 2014/15 crop year totaled 495,000 mt while the five-year average disappearance for this period is 364,000 mt, which suggests that AAFC's ending stocks estimate of 150,000 mt is likely to be increased, which should weigh on prices.
December 31 barley stocks were reported at 5.666 mmt, up 4.1% from last year and down 2.2% from the five-year average. Implied demand in the first five months is reported to be 3% higher than last year, pointing to a solid recovery in feed demand given the weaker export situation faced this crop year. January-through-July disappearance in 2014/15 totaled 4.2 mmt, while the five-year average is 4.4 mmt, suggesting that ending stocks may be revised lower that the current 1.950 mmt currently estimated by AAFC.
Oat stocks at the end of the 2015 calendar year were pegged at 2.550 mmt, almost equal to the volume reported for December 2014 and 5.2% above the five-year average. One pre-trade report suggested a range of trade estimates from 2.65 to 3.1 mmt, while slightly lower oat exports year-to-date point to higher than expected feed demand. The January-through-July disappearance totaled 1.9 mmt in 2015, while the five-year average is 1.7 mmt, supporting the current AAFC view of 2015/16 carry-out of 825,000 mt. The oat market was not fazed by this report, posting modest losses for the day.
Lentil stocks were reported at 869,000 mt as of December 31, down 47.4% from December 2014 and 48.3% below the five-year average. This is a seven-year low despite record acres and production reached in 2015, which speaks to the rapid pace of exports. To indicate how tight stocks are, the January-through-August disappearance over the past five years has averaged 1 mmt, while was 1.3 mmt in 2015, suggesting that supplies will dwindle to negligible levels in the upcoming months given the current pace of disappearance.
Dry pea stocks were reported at 2.212 mmt, down 2.7% from last year and 2.2% above the five-year average. Prior-year adjustments boosted current year supplies by 231,000 mt, while last year's January-through-July demand resulted in disappearance of 1.6 mmt and the five-year average is calculated close to 1.8 mmt, suggesting that ending stocks could be higher than the current estimate of 275,000 mt forecast by AAFC.
Canada's Dec. 31 soybean stocks were reported at 3.351 mmt, up just 1% from December 2014 despite the country's record production in 2015. Canada's Dec. 31 corn stocks were reported at 11.364 mmt, up 17% from December 2014 and a retracement to near December 2013 levels.
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