Ending stocks can be tricky to report

‘You’ve reported too high a number. It’s ruining the price.”

Grain and oilseed ending stocks, what can I say? We report them, along with adding all the context we feel is relative.

Whenever estimates of these fickle creatures come out, there are some who want to suggest the estimators are wrong.

This isn’t confined to Canada. The U.S. Department of Agriculture supply and demand reports get the same treatment from their farmers.

And with this spring season’s very dry start for the vast majority of farmers in Western Canada, canola ending stock estimates by Agriculture Canada are being called into question by many producers.

In some cases, our readers blame us for reporting them, adding to the negative pressure on prices.

China is at the centre of the issue, refusing to take 40 percent of the Canadian canola crop, as it has in recent years, and that means the 2019-20 crop appears to be filling the bins long before it’s harvested, or even germinated in the droughtier parts of the region.

And therein lies the rub. How can the federally employed industry experts make a guess on where the ending stocks will be this early in the production season with all that is going on? And they had to do it with producer-survey numbers from the end of April. In all likelihood, very carefully.

Some producers are suggesting that the drought issue, and it is significant, is not being factored heavily enough into the mid-May numbers and as a result the ending stock estimates are too high. And our stories, on the whole, reflect that.

There is no doubt these ending stocks are putting downward pressure on canola price projections, price offers for old crop and opportunities for the new one. The reality we reported, when writing about carry-out stocks for 2019-20, is a 40 percent increase over last year. Every farmer can compare that to their own local experience, read our stories every day about the markets and come to their own conclusions.

Unless something suddenly changes, the outcome will be more of the same: too much crop and not enough market. We all know that neither of those are prone to sudden swings, right?

The best we can do is keep reporting what is new and known and hope the situation improves.

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