Canola Ending Stocks Revised Higher Still

With the latest 2019 production and final 2018-19 ending stocks estimates now in, Canadian canola ending stocks for the current marketing year are poised to reach a new record high.

In updated supply-demand estimates released late Friday afternoon, Agriculture Canada forecast 2019-20 canola ending stocks at 4.5 million tonnes, up from 3.77 million last month and topping the previous high of 3.87 million reached just this past marketing year. At the currently estimated ending stocks level, the 2019-20 canola stocks to use ratio is pegged at 24%, up from 20% in 2018-19 and slightly above the 22% experienced in 2009-10.

This month’s supply-demand estimates reflect Statistics Canada’s Sept. 6 stocks report – which provided the final 2018-19 ending stocks numbers for most crops - and its Sept. 12 model-based crop production report. The production report raised this year’s canola crop to 19.35 million tonnes from the federal agency’s initial estimate of 18.45 million.

With a larger carryin from the 2018-19 crop year and this year’s upwardly revised crop, the 2019-20 total canola supply is projected to reach a new high of 23.33 million tonnes, up from 22.37 million in August and an increase of 1.5% from the previous year.

On the demand side, Ag Canada sees the 2019-20 domestic crush at about 9.3 million tonnes, up just slightly from last month and about steady from the previous year, as the industry is expected to continue operating at near full capacity. Canola exports are forecast at 9.2 million tonnes, up 200,000 from the August estimate bit but still below 2018-19 exports of 9.38 million and well below the five-year average of 10.1 million.

The 2019-20 average canola price is forecast at $440-480/tonne, versus the 2018-19 average of $497.

In other supply-demand changes this month, Ag Canada is projecting 2019-20 all wheat ending stocks at 6.1 million tonnes, up sharply from 5.5 million in August. The increase is predominately due to a much larger carryin from 2018-19, with the Sept. 6 stocks report putting Canadian all wheat stocks as of July 31 at 6.18 million tonnes, compared to last month’s Ag Canada estimate of just 5.2 million.

At 32.49 million tonnes, this month’s estimate of 2019 all wheat production is little changed from Ag Canada forecast of 32.5 million in August.

Durum ending stocks for 2019-20 are seen at 1.1 million tonnes this month, little changed from 1.2 million in August but down sharply from 1.61 million in 2018-19. Wheat (excl durum) ending stocks are forecast at 5 million compared to 4.3 million last month and 4.56 million a year earlier.

Barley ending stocks for 2019-20 are projected by Ag Canada at 1.7 million tonnes this month, up from 1.45 million in August and almost double the 2018-19 ending stocks of 893,000. Oat ending stocks are pegged at 500,000 tonnes, down 100,000 from last month’s estimate but above 2018-19 ending stocks of 414,000.

This year’s average barley price is forecast at $210-240, a drop of $20 from August and well down from the 2018-19 average of $260. The average oat price is seen at $225-255/tonne, unchanged from last month and compared to the 2018-19 average of $254.

Source: DePutter Publishing Ltd.

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