MONTREAL — If anybody wants to enjoy a mystery in the western Canadian grain business, look no further than canaryseed stocks.
No one ever really knows how much is out there.
“The actual supply is a perpetual mystery,” said Neil Townsend of Farmlink Marketing in a market outlook presentation during the Pulse and Special Crops Convention.
“The balance sheet looks tight, but maybe not as tight as it looks to be.”
Farmers have long vexed Statistics Canada, market analysts and traders trying to assess how much of the canaryseed is in storage on farms. Officially there can be little or none, but if prices rise, lots appears. That’s unlikely to change, said Kevin Dick of AC Trading.
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“It’s a grower’s homerun commodity,” said Dick.
“They will bin it for years.”
Not only is it a volatile commodity, experiencing periodic spikes in price, but storage is no problem, with quality unlikely to be damaged in the bin.
Dick noted that overall on-farm stocks are a combination of crops farmers might want to move for cash flow and those they’re holding onto until prices spike.
“There’s probably about 20,000 tonnes at 25 cents and there’s probably 30,000 tonnes at 40 cents,” said Dick.
“When you use a carryout number on canaryseed, it’s always very price dependent.”
Apparently, available stocks might be lulling the market into complacency, Dick said.
“There’s a lot of hand-to-mouth buying,” he said.
However, the stocks situation might change “if we don’t get yields, if the acres are a little bit lower.”
Right now, there’s more action in the market because of Ilta Grain’s financial problems, which has cut loose some canaryseed sales to Mexico.
Townsend said canaryseed supplies are once more likely to be hard to pin down.
“The balance sheet looks to be tight, but maybe not as tight as it looks to be,” said Townsend.
