Old-Crop Cupboards Bare in Canada

September 9, 2013 02:28 AM
Old-Crop Cupboards Bare in Canada

Old-crop Canadian wheat stocks are running tight, but canola is even tighter.

Stocks of old-crop Canadian wheat and canola are running extremely tight, but harvest supplies have already started to move into the system.

As of July 31, total stocks of most crops were substantially lower than the same date in 2012, according to Statistics Canada’s stocks of principal field crops report released Sept. 6.

"The report is really a reflection of how very, very tight all of these crops were," says Jon Driedger, with FarmLink Marketing Solutions, Winnipeg. Driedger was the commentator on a post-report MGEX conference call.

"The report was close to what the market was looking for," Driedger adds.

Looking at wheat first, total stocks declined 14.8% to 5.1 million metric tons as of July 31, due mostly to a 16.5% decline in commercial stocks. Stocks held on farms fell 202,000 metric tons to 1.6 million. Total wheat stocks as of July 31 were well below the five-year average of 5.5 million metric tons.

Excluding durham wheat, stocks as of July 31, which consist primarily of hard red winter wheat, stood at 3.9 million metric tons, a decline of more than 500,000 tons from 2012 and substantially smaller than 2011 summer stocks.

"Last year, we saw strong demand, and high prices pulled wheat into the feed sector," says Driedger. "With prices high the signal was strong for farmers to get wheat into the system. There was no incentive to hold wheat."

Canola Even Tighter

Stocks of old-crop canola were even tighter.

"Canola stocks as of July 31 were extremely tight, but not that much below the previous year, which also was a year with extremely tight stocks," says Driedger. "Stocks are at a bare-bones minimum. We are right down to bare pipeline stocks."

Canola stocks fell 14% to 608,100 metric tons as of July 31, which was significantly lower than the five-year average of 1.5 million tons. Commercial stocks fell 24.3% to 408,100 tons, but on-farm stocks were up 19% from the same date in 2012 to 200,000 tons.

Stocks of barley and oats were also tight, with barley stocks down 17.7%, or 212,000 tons lower than a year earlier, to 983,400 metric tons. Total stocks of oats declined 36.9% from year-earlier levels to 510,800 metric tons, well below the five-year average of 846,200 tons.

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