Canadian wheat, canola stocks smaller than thought

08.05.2017

Canadian canola stocks fell even faster than expected, data from Statistics Canada showed, while wheat stocks, although hefty, fell well below expectations.

Total wheat stocks came in at 16.6m tonnes, up 16% year-on-year, but well short of the average trade expectations of 18.3m tonnes, in Statistics Canada's latest estimates.

The shortfall in durum wheat was particularly marked, coming in at 4.1m tonnes, up 51% year-on-year, but 1.1m tonnes short of analyst's average prediction.

Good planting prospects

But gains in wheat prices were limited by the fact that conditions for plantings are finally starting to look helpful.

"Spring wheat planting is progressing nicely in the Northern Plains and expanding in western Canada," said Brain Henry, at Benson Quinn Commodities.

July spring wheat futures in Minneapolis were up 0.8% in morning deals, at $5.51 ѕ a bushel.

Canola stocks fall faster than expected

Canadian canola stocks in commercial and farm storage were reported at 6.6m tonnes, 100,000 tonnes below expectations.

Stocks are down 23% year-on-year, at a four-year low.

"Harvesting delays are part of the blame," said Terry Reilly.

After last year's harvest was stalled due to wet weather, with farmers now trying salvage some unharvested acres before spring planting.

July canola futures were up 1.3% in morning deals, at an eight-week-high of C$529.70 a tonne,

Quality questions

As well as stock sizes, markets are still weighing up quality issues, both for last year's harvest and for the leftover crops for this year,.

"Canadian wheat exports fell short of expectations in 2016, due in large part to the perceived lack of quality despite a favourable foreign exchange position," said Tregg Cronin, at Halo Commodities.

Mr Cronin noted that given the large amount of canola and wheat left in the fields over window, quality is "a real wild card".
 


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