Disappointment Over Inventory Levels

VANCOUVER - May 7/12 - SNS -- Statistics Canada's stocks in all positions report for March 31 contained few surprises, showing a dramatic reduction in field pea inventories and little change in the quantity of lentils stored on farms and in commercial facilities.

Markets were disappointed by the lentil inventory numbers, hoping that farmers would have fed much more product to livestock than appears to be the case. By contrast, markets wanted to see bigger field pea inventories because of expectations of improving world demand, stemming from Ramadan and a poor rabi season harvest in Pakistan.

Stocks of all special crops plunged 1.0 metric tons (MT) to 2.235 million. Inventories in commercial hands sank from 540,000 to 336,000 MT; while stocks on farms dropped from 2.703 to 1.899 million MT. Inferred use of all specialty crops was down 200,000 MT at 3.25 million MT for the August through March period, as a jump in lentil disappearance was offset by slower pea movement.

The March Farm Survey of 13,400 farmers concerning, among others, stocks of principal field crops was conducted from March 23 to 30, 2012. Farmers were asked to report the amounts of grain, oilseeds and special crops in storage on their farm.

Data on commercial stocks of western major crops originate from the Canadian Grain Commission. Commercial stocks of corn and soybeans are estimated on the basis of a sample of grain elevators in Eastern Canada. Data on commercial stocks of special crops come from a survey of handlers and agents of special crops.

Looking at all crops, Statistics Canada said that as of March 31, total stocks of canola and wheat were down compared with the same date in 2011. Total stocks of corn for grain and soybeans increased to record levels.

Despite a record harvest of canola in 2011, total stocks stood at 4.3 million metric tons (MT) as of March 31, 2012, down 30.6% or 1.9 million MT from the same date in 2011. The drop was primarily in on-farm stocks, where levels fell by 1.7 million MT.

Total wheat stocks declined 8.4%, or 1.3 million MT, to 14.5 million MT. This decline occurred despite a 9.0% increase in the production of wheat in 2011. Commercial stocks increased 10.8% to 4.7 million MT, while on-farm stocks fell 15.3% to 9.8 million MT.

Despite an 8.8% decrease in the production of corn for grain in 2011, stocks rose 8.1% from 2011 to a record 6.2 million MT in 2012. This level was 2.5% higher than the previous record of 6.0 million MT in March 2009. Commercial stocks were down slightly from March 2011 levels, while on-farm stocks were up 13.3% to 4.4 million MT.

Soybean storage was also at a record level in March 2012, as total stocks increased 19.0% to 1.9 million MT. Soybean production fell 2.3% in 2011 from a record high the previous year. The increase in total stocks was concentrated on farms, where stocks rose 34.4%.

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