Canada Markets

AAFC's October monthly release of supply and demand data shows a dramatic turnaround in stocks of principal field crop stocks from 2013/14, when stocks reached a burdensome level of 17.702 million metric tonnes due to record Prairies production combined with bottlenecks in getting it moved off the Prairies.

Production data was updated using the September estimates from Statistics Canada, which were arrived at through surveys conducted early in harvest. While the overall production of all field crops is expected to fall by 21.7%, reducing available supplies for the crop year, the export volume is expected to fall only 3.6% from 2013/14 while domestic use is expected to fall by only 4%.

Ending stocks for 2014/15 are forecast to be 50% below that seen in 2013/14, but also below that carried out of the two crop years leading up to the record year of 2013/14. A good example is that of the all-wheat estimate for Canada, which at 5 mmt, would be the lowest volume carried out of a crop year since July 2008.

The tightening in stocks will have a greater impact on some pulse and special crops with the dry pea, lentil, dry bean, mustard and canary seed crops all showing a stocks to use ratio at the end of this year ranging from 9% ( dry beans) all the way down to 3% (lentils) for 2014/15, a sign of historical tightness.

While the final November estimates may result in a crop size that is bigger than estimated in September, export demand combined with an extension of the weekly mandated volume mandate for the railroads could continue to keep stocks tight and be supportive of prices.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Follow Cliff Jamieson on Twitter @CliffJamieson

(ES)

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