May 8, 2008

  

Canada's grain supply tight, demand within expectations

 

 

There were few surprises in the Statistics Canada grain stocks-in-all-positions report for the period ended March 31, 2008, with estimates for the main crops coming well within pre-report expectations.

 

Participants said the market focus already has turned to new-crop issues.

 

The Statistics Canada rapeseed estimate of 3.7 million tonnes (on farm and in commercial position) was well within pre-report expectations that ranged from 3.328 million to 3.985 million tonnes. Rapeseed supplies at the same time a year ago were 4.755 million tonnes.

 

Although rapeseed numbers are low, Tony Tryhuk, vice President and Manager of Commodity Trading for RBC Dominion Securities Inc. "However, with the absence of fresh export demand around, there are few supportive tendencies for the commodity."

 

Tryhuk said although supply is lower than usual, considering strong cash bids over the winter offered by various outlets, producers were fairly aggressive in their deliveries.

 

The government agency pegged on-farm rapeseed supplies as of March 31, 2008, at 2.468 million tonnes, which compares with 3.833 million at the same time a year ago.

 

"We saw some fantastic prices this year, and based on that, we should see a lot less on farm in comparison to previous years," Tryhuk said. "Those on- farm rapeseed supplies are where we should be at," Tryhuk said.

 

Barley stocks on farm and in commercial position were pegged by Statistics Canada at 4.460 million tonnes compared with 4.572 million at the same time a year ago. Pre-report estimates had expected March 31 barley stocks to range from 4.300 million to 4.925 million tonnes.

 

"The market was probably happy that supplies of barley were not any tighter than they were," Ball said. However, he said the market has been anticipating these tight stocks for quite some time.

 

Barley supplies were seen as being the tightest on record, Jubinville said.

 

That condition has existed for a long time, he said, and given that barley prices are at all-time-record highs, the estimates are not likely to change.

 

The all-wheat stocks was considered low relative to last year, but the market is likely to focus its attention mainly on the large US winter wheat crop that is about to be harvested, Jubinville said.

 

All-wheat stocks in Canada as of March 31, 2008, totaled 10.825 million tonnes, according to Statistics Canada. This was down from the year-ago level of 15.977 million.

 

"Wheat supplies in Canada are tighter than they were at the same time last year, but I think the market place has already factored that in," Jubinville said.

 

Oat stocks in Canada were also within trade expectations. Statistics Canada pegged oat stocks on farm and in commercial position at 2.017 million tonnes compared with 1.548 million a year ago.