Canada Markets

Agriculture and Agri-Food Canada released its May Canada: Outlook for Principal Field Crops report Wednesday, bringing up to date Canadian supply and demand estimates while incorporating recent reports from Statistics Canada. This included the Principal field crop areas report released April 23 and the Stocks of principal field crops as of March 31, released on May 6.

Here's a quick look at some of the adjustments made, by selected crop:

Durum ending stocks for 2014/15 were left unchanged at 1 million metric tons, down nearly 44% from the previous year with an upward adjustment in 2013/14 ending stocks off-set by a 100,000 metric ton increase in current year exports combined with an increase in domestic disappearance. 2015/16 ending stocks are expected to remain steady at 1 mmt, up 200,000 mt from last month's estimate, given Statistics Canada's estimate for higher seeded acres.

Revisions to 2013/14 ending stocks also saw 2013/14 wheat (excluding durum) ending stocks increased by over .5 mmt which carries through, boosting 2014/15 ending stocks. 2014/15 exports are revised 200,000 mt lower from last month to 17.8 mmt, while feed, waste and dockage was increased over 200,000 mt, resulting in an increase of 500,000 mt to the current year ending stocks to 5.7 mmt. 2015/16 ending stocks are expected to fall to 4 mmt, up 400,000 mt from last month and almost a full retracement to the 2012/13 crop year.

Perhaps the biggest eye-opener was AAFC's canola data for May. AAFC fiddled with the feed, waste and dockage column by increasing it by 525,000 mt, resulting in an ending stocks figure of 950,000 mt for 2014/15, down from last month's 1.450 mmt. Despite a year-over-year reduction in export demand of 1.2 mmt and an increase in domestic crush of 200,000 mt, ending stocks are expected to fall to 500,000 mt next crop year. As indicated on the attached chart, this would reflect the smallest carryout seen since 1997/98 when 363,000 mt were carried out of the crop year.

There was an interesting response in today's new-crop trade, with forward spreads weakening slightly, from the Nov/Jan to the May/July. While these spreads remain either inverted or close to it, a bullish signal derived from commercial activity, concerns over next year's tighter stocks and the potential for freeze damage were not noted in today's trade.

Ending stocks for barley in Canada were revised significantly higher since the April report, with both a reduction in exports of 100,000 mt and a reduction in feed usage of 254,000 mt contributing to the move. Barley's ending stocks are expected to come in at 1 mmt for 2014/15, almost a 50% reduction from last year, but well above the 650,000 mt reported last month. 2015/16 ending stocks are expected to fall only slightly to 950,000 mt despite significantly higher production, given a lower carry-in volume.

Despite the jump in lentil and pea acres on the prairies, AAFC boosted both old-crop and new crop export targets higher. While expectations suggest a 100% year-over-year increase in ending stocks for both, ending stocks are below month ago estimates and continue to remain at extremely tight levels.

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

Follow Cliff Jamieson on Twitter @CliffJamieson

(ES)

© Copyright 2015 DTN/The Progressive Farmer. All rights reserved.