Canadian Stocks Lower Than Expected

VANCOUVER - Feb 3/12 - SNS -- Statistics Canada's December 31 stocks in all positions report paints a tighter supply picture than markets were expected, with farmers seeming to have sold many more off-grade lentils and field peas to local livestock feeders than markets expected.

The net result is that the total quantity of specialty crops on hand as of December 31 plunged 39% from last year's 4.511 million metric tons (MT) to just 2.754 million as of December 31, 2011. This is the smallest inventory of pulses and other specialty crops since 2007, when Statistics Canada reported there were 2.535 million MT in all positions.

Lower specialty crop inventories were part of a broader trend. Statistics Canada reported that inventories of most principal field crops, including commercial and on-farm inventories, were down compared with the same date in 2010.

The numbers were based on a computer assisted telephone survey of 10,560 Canadian farmers between January 3 and 10. Data on commercial stocks of western major crops originate from the Canadian Grain Commission.

Discussing other crops, Statistics Canada said that despite record production of canola in 2011, up 10.9% from 2010, total stocks declined for the second consecutive year, down 1.5% to 9.3 million metric MT. This decline was the result of a 2.4% decline in on-farm stocks, which more than offset a slight increase in commercial stocks.

On-farm stocks of all types of wheat fell 4.0% to 16.3 million MT. However, commercial stocks increased 20.9% to 4.7 million MT. As a result, total stocks edged up 0.6% from December 31, 2010, to just under 21.0 million MT, despite a 9.0% increase in wheat production in 2011. The decline in on-farm stocks at the national level was the result of a decrease in on-farm storage in Saskatchewan and significant declines in production and on-farm storage in Manitoba.

Total stocks of corn for grain fell 4.0% to 8.6 million MT in tandem with a decline in production in 2011. However, on-farm stocks rose 1.5% to 6.8 million MT, the result of a 4.9% increase in on-farm stocks in Ontario, where they reached a record high.

Total stocks of oats fell 14.5% to 2.0 million MT, driven primarily by a 14.2% decrease in on-farm stocks. These declines occurred despite a 20.9% increase in oats production in 2011. Similarly, on-farm stocks of barley declined 9.6%, despite a 2.0% rise in production in 2011. Consequently, total stocks were down 10.8% to 5.1 million MT from levels at December 31, 2010. For both barley and oats, declines in total stocks have been recorded for the last three years.

For soybeans, total stocks rose 0.6% to 2.6 million MT, while production decreased 2.3% in 2011. On-farm stocks increased 20.2% to 1.8 million MT. This increase was driven by record on-farm storage levels of 1.1 million MT in Ontario. Meanwhile, commercial stocks fell 26.9% to 770 000 MT, their lowest level since 2003.