MarketsFarm — Canadian canola ending stocks were down sharply at the end of 2020-21 compared to the previous marketing year, but still came out well ahead of trade expectations.
Many other crops also saw larger-than-expected carryout numbers in Statistics Canada’s principal field crop stocks report as of July 31, 2021, released Wednesday.
According to MarketsFarm Pro analyst Mike Jubinville, the latest numbers have exceeded many trade estimates.
“All of them are a little higher than expected for the most part,” he said. “Some are really close, but generally speaking they’re higher.”
Canola stocks decreased by 48.6 per cent on the year to 1.8 million tonnes as of July 31, their lowest level since 2017. Also contributing to the lower numbers were both a record amount of crushing (up 2.8 per cent, to 10.4 million tonnes) and exports (up 4.9 per cent, to 10.5 million tonnes).
Despite lower wheat production, 2020-21 ending stocks were 5.71 million tonnes, an increase of 3.7 per cent.
Opening supplies were higher than in 2019-20 (up 4.6 per cent to 40.6 million tonnes) and higher commercial stocks (up 7.1 per cent to 3.5 million tonnes) were the primary reasons for the gains, but lower on-farm stocks (down 1.3 per cent to 2.2 million tonnes) and a 10.1 per cent rise in exports to 26.4 million tonnes tempered the increase.
“Spring wheat is maybe one million tonnes higher than what the trade is expecting. Canola is maybe (500,000) tonnes higher,” Jubinville said. “These are relevant in terms of bigger numbers. Game changers, not necessarily, but it takes the bloom off the bullish rose for both of them to some modest extent.”
Ending stocks for barley reached a record low of 711,100 tonnes, a drop of 25.7 per cent from the year before. Increases in off-farm deliveries (up 17.4 per cent, to 5.1 million tonnes) and exports (up 54.8 per cent, to 4.6 million tonnes) added to already declining stocks.
On the other hand, oat ending stocks rose 54.7 per cent to 658,500 tonnes on the strength of declining domestic use and higher opening stocks, which led to increases in both on-farm and commercial stocks. However, oat exports increased 12.2 per cent to 2.9 million tonnes, the highest on record.
Dry pea stocks saw the largest gains out of all Canadian principal crops, rising by 105.6 per cent to 478,500 tonnes as of July 31 compared to the previous year. Higher opening stocks, as well as reduced exports to Bangladesh and India, helped with the gains.
Lentil stocks nearly doubled, jumping by 94.3 per cent to 405,600 tonnes, as declining exports to India, Bangladesh and Turkey kept more of the crop at home.
Considering both peas and lentils are approaching historical highs in prices, Jubinville is skeptical about Statistics Canada’s estimates.
“The peas and lentils, that are probably a few hundred thousand tonnes higher than expected, raise some question marks in my mind about the accuracy in the numbers,” he said.
“To have comfortable levels of ending stocks at the end of the marketing year, that just can’t be. The trade is fighting for those supplies. It doesn’t make any sense to me. There’s something amiss in this report, in my opinion.”
Jubinville also questions the methodology of collecting on-farm old-crop stocks data, adding it should have been done in July for Statistics Canada’s August crop estimate report rather than in May and June in order to get more accurate numbers instead of “extrapolations.”
“I’m a little confused by it,” he added. “This feels a little iffy about what (Statistics Canada) is using here. So I have to take their numbers that they presented at face value.”
Table: Ending stocks for Canadian principal field crops at July 31, 2021, with year-earlier numbers and five-year averages for comparison. Source: Statistics Canada.
|Total stocks at||Total stocks at||Five-year avg.|
|July 31, 2021. .||July 31, 2020. .||(2016-20)|
|All wheat. .||5.705||5.499||6.076|