A weakening Canadian dollar has helped boost Canada’s exports of wheat—much of it moving to U.S. elevators—and other crops, which has slashed year-end stocks.
A robust export market coupled with 2014’s poor growing season, has reduced year-end stocks of wheat, corn, oats and barley in Canada, compared with 2013’s hefty inventory levels, according to Stats Canada’s Stocks of Principal Field Crops report, released Feb. 4.
Despite significantly lower feed use of principal grains, Canada’s year-end stocks have returned to “more normal levels,” says John Duvenaud, partner in Canadagrain and Wild Oats Grain Market Advisory, in Winnipeg.
Feed usage in Canada in 2014 dropped 2.4 million tons below the previous year, with most of the reduction in wheat, down 1.1 million metric tons, and durum wheat, down 1 million metric tons. Feed usage of oats fell 200,000 metric tons.
Of the principal field grains stocks, only soybean inventories were higher, which reflects the country’s slow shift into beans. December 31 soybean stocks rose 29.4 percent from the previous year to a record 3.5 million metric tons, surpassing the previous year-end high of 2.8 million metric tons in 2011.
Beans, Peas and Lentils in 2015
No doubt, Canadian producers will look to plant more soybeans again in 2015, says Duvenaud, but this year’s hot crops will be peas and lentils for the export market.
“Soybeans are still a fabulous crop for Canadian farmers, even though they aren’t as lucrative as they were,” says Duvenaud. “But the big change this year will be more peas and lentils.”
Canadian exports of peas and lentils for human consumption are very strong, and high prices will entice Canadian producers to plant them, he adds.
Wheat Moving to U.S. Elevators
According to Stats Canada, year-end wheat stocks plunged 13.5 percent from 2013 levels to 24.8 million metric tons, following a 22 percent decrease in 2014 wheat production.
“A lot of wheat is being moved to North Dakota and Montana,” notes Duvenaud. “The outlet of choice for southern Manitoba, Saskatchewan, and Alberta wheat farmers is south of the border because elevator bids are $1 higher than they are in southern Canada.”
With the Canadian dollar plunging, durum wheat exports have surged, he notes. The Canadian dollar has plunged from near parity in July to below 80 cents in late January, against with the U.S. dollar.
Canola stocks stood at 11.1 million metric tons as of December 31, down 10.5 percent from 2013. Canada’s lower year-end canola stocks reflect last year’s 13.4 percent drop in canola production.
Total stocks of corn for grain at 9.7 million metric tons on December 31 were 16.6 percent below 2013’s record-high of 11.6 million metric tons.
Oat stocks were 12.7 percent below a year ago at 2.5 million metric tons, and barley stocks plunged 20.3 percent to 5.4 million tons.
“Barley feed use was lower than we thought it would be,” notes Duvenaud. “By the end of this crop year, barley stocks will probably be at a record low.”
The report was not expected to move markets.