It is interesting to note on the attached chart that producers have delivered more canola into the licensed handing system, 19.641 million metric tons in total, than the sum of the estimated farm stocks, as of July 31 2016, along with the estimated production for 2016.
In total, producers delivered 302,600 mt more seed into the licensed handling system than the current estimates would allow for, while as of May, the Canadian Grain Commission reports an additional 120,538 mt exported through unlicensed channels.
This data sets the stage for an upward revision in prior-year production, while ending stocks will come in higher than forecast by AAFC given that commercial stocks at the end of the crop year totaled 732,200 mt, higher than the 600,000 mt of total stocks last estimated by AAFC.
Of the major grains selected, canola is the only crop to signal this situation. The cereals such as wheat, durum, oats and barley show the largest volumes remaining after delivery into licensed facilities is deducted, which will be further reduced by unlicensed deliveries and movement into domestic feed markets.
Will past relationships of ending commercial stocks have a bearing on 2016/17 ending stocks? Week 52 commercial stocks of wheat (as of July 31) shows 2.9888 million metric tons of wheat, while over the past five years, commercial stocks have averaged 57.6% of total ending stocks, suggesting ending stocks at roughly 5.2 mmt, which is well-above the current AAFC estimate of 4.3 mmt.
Week 52 commercial stocks of durum are estimated at 777,000 mt as of July 31, while over the past five years, commercial stocks has averaged 65.6% of total stocks, which would extrapolate to stocks of 1.2 mmt as compared to the current AAFC estimate of 2.1 mmt for 2016/17. Commercial stocks of oats are reported at 122,000 mt, while over the past five years, this volume represented an average of 28.5% of total stocks. This points to the potential for a 428,000 mt carryout, slightly tighter than the current 650,000 mt carryout estimated by AAFC.
Week 52 commercial stocks of barley are estimated at 302,800 mt, while over the past five years, commercial stocks made up an average of 15.3% of total stocks, which could lead to ending stocks of close to 2 mmt, only slightly lower than the current 2.125 mmt AAFC estimate.
Commercial stocks of canola were estimated at 732,200 mt, as of July 31, already higher than the total stocks estimate of 600,000 mt shown by AAFC. Over the past five years, commercial stocks made up an average of 57.8% of total stocks, which points to a potential total ending stocks estimate of 1.267 mmt, or more than double the current 600,000 mt estimate released by AAFC.
Commercial stocks of flax, as of July 31, totaled 66,900 mt, while over the past five years, estimated stocks data shows commercial stocks comprising approximately 50.4% of total stocks, suggesting stocks near 133,000 mt and just slightly higher than the current AAFC estimate of roughly 120,000 mt.
Commercial stocks of dry peas shows 130,600 mt held by commercials, while over the past five years, this value proved to make up an average of 43.9% of total stocks, pointing to ending stocks close to 300,000 mt, higher than the current 125,000 mt AAFC estimate. Commercial stocks of lentils were reported at 84,300 mt, which has made up an average of 21.2% of total stocks over the past five years. This points to ending stocks close to 400,000 mt, as compared to the current AAFC estimate of 325,000 mt.
Statistics Canada's July 31 stocks estimates will be released on Sept. 6.
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