Large Canadian canola ending stocks expected, reaction neutral

Canadian canola ending stocks as of July 31, 2018, came in at about a million tonnes above the previous year’s carryout, but were still well within trade expectations.

Canola supplies as of July 31 were estimated at 2.391 million tonnes by Statistics Canada, with 954,000 tonnes of that in commercial hands and 1.437 million tonnes on-farm. That compares with 1.342 million tonnes of total stocks at the same point the previous year, with most of the difference linked to a sharp increase in on-farm stocks. The five-year ending stocks average for canola is 1.9 million tonnes.

ICE Futures canola contracts had little reaction in response to the report, with prices holding within a dollar of the previous day’s close two hours after the release.

While canola stocks were up on the year, the grains were generally tighter.

“Overall, I think (the report) is neutral for canola, and supportive for barley, spring wheat and durum,” said Jerry Klassen, manager of Canadian operations with Swiss-based GAP SA Grains and Products in Winnipeg.

Barley ending stocks came in at 1.256 million tonnes, which compares with 2.122 million the previous year and the five-year average of 1.5 million.

All-wheat stocks, which include durum, were pegged at 6.180 million tonnes, which was down 9.9 per cent from 2017 and compares with the five-year average of 6.9 million tonnes. Of that total, durum stocks were pegged at 1.473 million tonnes, which was a 19.4 per cent decline on the year.

Pea and lentil ending stocks were both up considerably on the year, which was expected given the poor export movement during the crop year. The pea carryout of 650,000 tonnes was more than double the 300,000 tonne stocks reported the previous year. Lentil ending stocks of 876,000 tonnes were up 178.1 per cent.

“Looks like another tough year in the pulse markets, unless the Indian import situation is resolved,” said Bruce Burnett, director of markets and weather with Glacier FarmMedia in a daily newsletter.

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