Canada Markets

Agriculture and Agri-Food Canada released its monthly Canada: Outlook for Principal Field Crops on July 18. This included the latest seeded acre estimates released by Statistics Canada on June 29. The outlook reported stocks of all principal field crops in Canada in 2015/16 to grow by 520,000 mt from the June estimate to 10.715 million metric tons, down 26.5% from 2014/15 estimates. At the same time, the estimate for 2016/17 stocks were reduced by 310,000 since June to 10.075 mmt, down 6% from the current crop year.

Durum exports for 2015/16 were revised lower by 200,000 metric tons to 4.5 million metric tons, because of extremely light shipments over the past seven weeks. More revisions could be seen, given that current exports from licensed facilities that are roughly 346,000 mt behind the pace needed to reach the previous target of 4.7 mmt as of week 49 data. Wheat exports were also revised 200,000 mt lower to 17.3 mmt. Current licensed exports are roughly 1.2 mmt behind the pace needed to reach the previous 17.5 mmt target, while unlicensed exports as of April totaled 508,071 mt. When combined with unlicensed exports realized over the final quarter of the crop year, as well as exports of flour reported at 241,831 mt as of April, this could allow the target to be realized.

The largest changes were seen with wheat, durum and flax stocks. Ending stocks of durum for 2015/16 were increased 150,000 mt to 1 mmt, while wheat stocks (excluding durum) were increased by 200,000 mt to 3.2 mmt and flax ending stocks were increased by 170,000 mt to 350,000 mt.

Over the past month, yield estimates for most crops have been revised slightly higher reflecting the largely favorable conditions on the Prairies, although both barley and corn yield estimates have seen slight downward revisions. The current production estimate for 2016/17 production of all principal field crops is just 283,000 mt lower than estimated for 2015/16, with a drop in grain and oilseed production partially offset by a corresponding increase in pulse and special crop production. Given the low level of carry-in stocks, exports of all principal field crops are expected to be 2.9 mmt or 6% lower, with large swings of a 1.8 mmt drop in wheat exports (excluding durum), a 300,000 mt drop from last month, along with a 1.5 mmt drop in canola exports to 8.5 mmt, a 500,000 mt increase from last month. Durum exports remain unchanged from last month at 5 mmt, while nearing the record volume of 5.174 mmt exported in 2015.

Given the record planted acreage of pulses on the Prairies, dry pea exports were left unchanged this month at 3.2 mmt, a fresh record, while lentil exports for the upcoming crop year were boosted by 200,000 mt to 2.6 mmt, a 19% increase from the current crop year.

2016/17 ending stocks for most of the principal field crops are expected to fall, with one noticeable exemption being durum, where ending stocks are expected to grow by 300,000 mt next crop year to 1.3 mmt, a three-year high, with a recovery in both Canadian and global supply expected to weigh on prices.

Ending canola stocks were left unchanged from last month at 700,000 mt, down 48% from the current crop year and a four-year low. Domestic demand is expected to remain relatively unchanged from the current crop year while demand is expected to be reduced sharply on the export side.

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

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