If you’re wondering what your neighbour, or the farmer in the neighbouring province, has in the bin, the answer is probably not much.
Statistics Canada information as of July 31 shows that total stocks of wheat, barley and canola are down from a year earlier, and we are talking way down.
While these are not historic lows, there are some remarkable plunges in carry-outs, with canola leading the way. Total stocks are down 64 percent from 2011 to 787,700 tonnes, but on-farm stocks are at 225,000 tonnes, the lowest since 2004.
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However, in the years since, farmers have seeded increasingly larger amounts of canola, and crushers have been buying pretty much everything they can get their hands on, so this is a different environment from eight years ago. Therefore, this dramatic drop is significant.
For canola stocks to be this low, farmers must have been aggressively cleaning out their bins in anticipation of this year’s harvest, which was widely expected to be enormous, at least based on seeded acreage.
Unfortunately, yellow asters, sclerotinia, hot weather, and variously wet and dry conditions have kicked some of the stuffing out of the canola crop. But if you are among those with fabulous canola, you’ll be laughing all the way to the crusher’s gate.
Wheat, meanwhile, may reclaim its royalty status. Total wheat stocks decreased 18 percent to 5.9 million tonnes, but again, that’s mostly due to the on-farm decline of nearly 900,000 tonnes.
Wheat stocks excluding durum are at their lowest point since 2008, at 4.4 million tonnes, and well below the five-year average of five million tonnes. Farmers were likely cleaning out their pre-CWB monopoly crop in anticipation of a new start, while also cashing in on higher prices because of American and Russian drought-related pressure.
Western Canadian stocks are mirroring what’s going on in the rest of the world. Drought will reduce stocks, countries are buying for fear of being caught short, and prices, naturally, are following the usual supply and demand fundamentals.
If you are combining even a reasonable canola or wheat crop (or for that matter, rye, mustard, chickpeas or barley), you probably have lots of room in the bin, and plenty of marketing options bolstered by strong prices.
