Canada Markets

Statistics Canada released its March 31 Stocks of Principal Field Crops report on Thursday morning. Declining stocks compared to year-ago levels were the primary theme with field peas, lentils, durum wheat, rye and soybeans the exemption to the rule. Sharply lower stocks of canola and oats demand the greatest attention with corn also a bullish surprise.

Beginning with canola, March 31 stocks came in at 5.869 million metric tons (mmt), compared to 9.581 mmt last year and data suggesting it should have been roughly 6.088 mmt. It was widely anticipated that Statistics Canada might revise production higher for previous years, and that the extra production would show up in higher stocks.

Even the USDA has been skeptical of the Statistics Canada 2024 canola production total with the former using 18.8 mmt, while the latter had been estimating 17.845 mmt. Given that, the lack of revisions should support prices.

With tight supplies amid a continued unsustainable pace of use, the on-farm stocks total drew added scrutiny. With total producer deliveries through week 34 (ending March 30) being 13.747 mmt (compared to 11.490 mmt last year) out of the possible 18.625 mmt (2024 production plus beginning on-farm stocks of 780,000 mt), there should only be 4.878 mmt remaining to deliver at most. In the end, Statistics Canada pegged on-farm stocks at 4.582 mmt compared to 8.007 mmt last year and only slightly higher than the 2021-22 drought-affected March 31 on-farm supply of 4.014 mmt.

With year-end stocks to come out of that yet, the data implies deliveries cannot likely exceed 4.2 mmt in the final 18 weeks of the marketing year (leaving just 382,000 metric tons of on-farm stocks at year-end). The average pace of deliveries would then be just 233,000 mt/week. That compares to the year-to-date average weekly use of 429,559 mt. Price is the most effective way to discourage use but when will that demand reduction show up and what price will it take (if current levels have been insufficient)?

It's worth noting that even though the global situation is very different, the canola futures price topped out at $1,219/mt the last time March 31 stocks were at similar levels.

Turning to oats, March 31 stocks came in at 1.283 mmt compared to 1.476 mmt last year. That puts them barely above the 2022 level of 1.227 mmt following the devastating drought of 2021. Prices eventually exceeded $11/bushel CAD in Southern Manitoba as physical short positions had to be bought out. Interestingly enough, on-farm totals are just as bullish with only 1.006 mmt remaining on March 31 compared to 1.137 mmt last year and not much above the 0.925 mmt on-farm stocks in 2022. Other than the 2022 low, you have to go back to 2003 to find tighter stocks.

While on the topic of feed grains, barley stocks fell slightly to 3.066 mmt, from 3.072 mmt last year. That could be taken as a bearish surprise considering ending stocks are expected to fall by 367,000 mt versus last year, according to Agriculture and Agri-Food Canada (AAFC). The culprit could be a reduction in animal feed use implied by the data. It is pegged at 4.270 mmt for the first quarter of 2025 versus 4.680 mmt for the previous year.

Increased feeding of Canadian grain corn (given the lack of imports from the U.S.) could be responsible. March 31 stocks of corn for grain were down 13% from last year, at 7.197 mmt compared to 8.268 mmt. Ending stocks are currently expected to be slightly above year-earlier levels according to AAFC, implying March 31 stocks should have been close as well. With March 31 stocks being 1.071 below last year, it suggests added feed use.

Wheat stocks came in little changed from last year with durum wheat supplies increasing 2.7% year-over-year to 2.003 mmt compared to 1.951 mmt last year. March 31 wheat ex-durum stocks fell 1.7% to 13.419 mmt compared to 13.650 mmt last year.

On the pulse side, dry field pea stocks did recover with March 31 supplies up 42% from last year at 1.356 mmt compared to 0.955 mmt last year. It's worth noting that 2024 marked the lowest total since 2008 with 2018 marking the highest this century at 2.259 mmt. Even though a 42% increase sounds serious, it just returns stocks to normal levels.

Lentils told a similar story with March 31 stocks up 30.3% from year-ago levels. At 1.048 mmt compared to 0.804 mmt last year, the increase simply returns stocks to more normal levels. The 2019 high was 1.697 mmt with a decade low being marked in 2016 at 0.555 mmt.

Soybeans came in at 2.393 mmt, up 10.9% compared to 2.158 mmt last year.

March 31 flax stocks fell 21.7% to 253,000 mt compared to 323,000 mt last year.

And, finally, rye stocks witnessed a dramatic rebound, up 55.7% compared to last year at 246,000 mt versus 158,000 mt the previous year.

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