February 5, 2010

Traders to watch canola in Canada's statistics report

 
Few surprises are expected in the Statistics Canada's quarterly grain and oilseed stocks report to be issued on Friday morning (Feb 5).

The data for the period ended on December 31, which are scheduled for release at 8:30 a.m. EST.

"The numbers will be used to confirm the 2009 production estimates for the various crops," said Gerry Klassen, a grain trader in Winnipeg.

He said most participants were fairly comfortable with the production estimates that the government agency used for canola and a few other crops, but they will be monitoring the numbers for confirmation.

Meanwhile, Ron Frost, a Calgary-based analyst with Agri-Trend Marketing and the Frost Forecasting Corp, said there are "definitely individuals out there that are questioning the canola production numbers from 2009, thinking that the 11.8 million tonnes may be a touch on the high side."

Frost added that the stock numbers give the industry a little better feel as to whether the 11.8 million tonnes was produced or whether that estimate was too high.

"It could also be the reverse, and we'll find that we're in fact even higher than that subtracting what we have had for disappearance so far," Frost said.

One of the factors behind the lower production ideas was the fact that spoilage of canola crops in northern Alberta and northern Saskatchewan have been higher than average, Frost said, noting that this was "something that will whittle away at the top end of that production number."

The stocks figures were also expected to provide a look at what usage has been so far.

"The stock numbers are also important as they will provide a good idea on what domestic usage of wheat and barley has been," Klassen said.

Ken Ball, a broker in Winnipeg, felt that the grain stocks numbers will likely be quickly overshadowed by other events, including next week's USDA monthly supply and demand report, which is due to be released on Tuesday (Feb 9).