Canola Stocks Jump, Many Drop

OTTAWA - Sep 6/19 - SNS -- Stocks of canola in all positions in Canada jumped sharply because of the effective loss of the Chinese market while stocks of many other commodities dropped from year earlier levels, according to Statistics Canada's survey of about 13,110 farmers between July 4 to August 5.

Overall canola stocks totalled 3.9 million metric tons (MT) as of July 31, 2019, up 55.0% from the same date in 2018. Both on-farm and commercial stocks contributed to the increase, with on-farm stocks up 60.0% to 2.6 million MT and commercial stocks up 45.6% to 1.3 million MT.

Record supply in 2018-19, coupled with lower demand, drove canola stocks higher compared with July 31, 2018. Canola exports decreased 12.9% from the previous crop year. Most of the decline was attributable to a drop in exports to China, which fell by approximately 1.0 million MT over the past 12 months.

As of July 31, 2019, total stocks of dry peas were down 40.1% year over year to 388,000 MT. Both on-farm (-49.3% to 193,000 MT) and commercial (-27.0% to 195,000 MT) stocks recorded decreases. The lower stocks for dry peas were largely the result of a 12.9% decline in production to 3.6 million MT in 2018-19.

Stocks of lentils totalled 654,000 MT as of July 31, 2019, down 25.1% year over year. The decrease was the result of lower on-farm stocks (-29.7% to 510,000 MT), as off-farm deliveries rose 22.5% year over year.

Total stocks of all wheat decreased 4.6% from 2018 to 6.2 million MT in 2019. The decline was due to on-farm stocks, which fell 39.8% to 1.9 million MT, offsetting a 30.3% increase in commercial stocks.

Together, low global wheat supply resulting from unfavorable growing conditions and a high demand for wheat (excluding durum) drove Canadian exports higher over the past 12 months, and this had the effect of decreasing ending stocks. As of July 31, 2019, exports were up 6.9% to 23.0 million MT compared with the same date in the previous year. This increase was led by exports to Indonesia and China, which both imported higher volumes of Canadian wheat.

As of July 31, 2019, barley stocks were at their lowest level on record, down 28.2% from the previous crop year to 893,000 MT. The decrease was attributable to lower on-farm stocks (-37.8% to 636,000 MT), as off-farm deliveries rose 7.5% year over year to 3.8 million MT. The decline in on-farm stocks offset an increase in commercial stocks, up 16.3% to 257,000 MT.

The decrease in barley stocks was partly due to a price-driven gain in deliveries. According to Agriculture and Agri-Food Canada, prices for malt barley have risen between 19% and 23%, while feed barley prices have risen approximately 15% from 2017-18. Higher feed barley prices are likely attributable to an increase in demand from livestock operations in Western Canada, which resulted in higher demand for feed barley. In addition, high international demand led to an increase in barley exports, up 12.0% to 3.2 million MT -- the highest volume since July 2008.

Oat stocks were down 46.8% to 414,000 MT as of July 31, 2019. The decline was the result of lower on-farm (-51.1% to 299,000 MT) and commercial (-30.7% to 115,000 MT) stocks.