Pre-harvest wheat inventories in Canada, the world’s largest exporter after the U.S., fell 14.8 percent from a year earlier, as farmers begin collecting bigger crops in 2013.
Stockpiles of all wheat varieties totaled 5.057 million metric tons as of July 31, compared with a revised 5.932 million in 2012, Statistics Canada said today from Ottawa. On average, six analysts surveyed by Bloomberg News expected 5.672 million tons. Canola reserves fell 14 percent to 608,000 tons, compared with analysts’ forecast of a 2.8 percent increase to 727,000.
While supplies are down, grain bins will be refilled in coming months. The government predicts wheat production in 2013 will reach a 22-year high of 30.6 million tons and canola will jump to 14.7 million tons, the most ever. Minneapolis wheat prices have tumbled 26 percent in the past year, while Winnipeg canola futures that in May were the highest since 2008 have plummeted since then, down 21 percent from a year ago.
"We knew there was a lot of disappearance of grain, and certainly with prices being as high as they were, the signal was very strong for farmers to get that grain into the system," Jonathon Driedger, a senior market analyst at Winnipeg-based FarmLink Marketing Solutions, said today on a conference call. Inventories of non-durum wheat are the lowest since 2007-2008 and reserves of canola are "extremely tight," he said.
Warm, wet weather in late June and early July boosted yield prospects across Western Canada. Above-average yields are being reported in Saskatchewan, the largest grower of spring wheat and canola. The yields for canola range between 30 bushels and 36 bushels an acre, the province’s agriculture ministry said. That compares to an average yield of 24 bushels to 27 bushels across most of the province a year earlier, reports show.
"Early yield reports are indicating above-average barley and spring-wheat yields with good quality and above-average bushel weights," Manitoba’s agriculture ministry said in a Sept. 3 report.
"I don’t think this report is too relevant," Jerry Klassen, the manager of Canadian operations and trading at GAP SA Grains & Produits, said in a telephone interview from Winnipeg before the report. Reduced grain reserves will have little impact on prices because good growing conditions across the Prairies and above-average yield expectations will mean ample crops this year, Klassen said.