Late snows, colder than normal temperatures, and wet fields are threatening planting across most of the Canadian prairies at a time when stocks are dwindling.
Canola stocks, in particular, are tight. According to a May 3 report released by Statistics Canada, as of March 31 canola stocks of 3.9 million metric tons were 24.9%, or 1.3 million tons, lower than a year ago. The decline came almost entirely from a 33.1-percent decline in on-farm stocks.
Despite a decent 2012 canola crop, stocks are tight and demand from both the canola oil industry and export market remains strong.
"Elevators are paying $14.50 a bushel for canola and farmers are bringing in what they can," says John Duvenaud, analyst with Wild Oats Grain Market Advisory. "It’s going to be tough to draw the rest out of farmers’ hands."
That said, he expects canola producers to sell old-crop canola by July. "They can take $14.50 now or hold it until August or September and get $13.50," Duvenaud says. "I don’t see it getting moved real quickly, but it will all get moved by July."
Total stocks of most principal field crops in Canada were lower than March 2012 inventories. However, total stocks of corn for grain increased to record levels. While corn is still a minor crop in Canada, 2012 production rose 15%, and stocks as of March 31 were 16.2% above year-earlier levels at a record 6.7 million metric tons.
"Seventy-five percent of the prairies still have snow cover," says Duvenaud. "We are already behind the eight ball on seeding."
Planting in much of Canada is now one to two weeks behind schedule. But with a shift to warmer and drier weather, Duvenaud says that producers will be able to get their crops planted in time to realize good yields.
"But it looks like there will be some acreage lost, maybe 3 to 5%," he adds. Wheat could be planted later, which would mean more wheat would go into feed wheat channels. Corn acreage will definitely decline, but more flax and oats could also be planted.
Canadian wheat stocks are more than ample despite an 8.1% year-over-year decline to 13.5 million metric tons.
Stocks of other crops were also lower. Total soybean stocks were 25.5% lower than a year ago at 1.3 million tons. Barley stocks have fallen to a record low of 3 million metric tons, 9.7% lower than March 2012 inventories. Oat stocks fell 29.9% from 2012 levels to 1.2 million metric tons.
Due to the low stocks of some field crop, a lot of U.S. dried distillers’ grains and corn have been imported into Canada this marketing year, says Duvenaud.