Canadian supplies of major crops, including wheat and canola, have dwindled year over year due to smaller harvests and smoother transport, but spring stocks still look relatively large, according to a Reuters survey of 12 traders and analysts.
On Wednesday, Statistics Canada will report crop supplies in commercial storage and on farms as of March 31, 2015, based in part on a farmer survey. The report offers a snapshot of supplies ahead of farmers planting of their next crop, but does not generate as much interest as Statistics Canada's July 31 stocks report, which measures levels at the end of the crop marketing year.
Farmers harvested big crops last autumn, but output was smaller than the record levels of a year earlier. Winter conditions were not as harsh, allowing for more effective railway movement of grains and oilseeds to ports or North American buyers. The average estimate in the Reuters survey was that total all-wheat stocks as of March 31 amounted to 17.7 million tonnes, down 19 percent year over year but still the second-largest pile in nine years.
Canola stocks were seen at 7.4 million tonnes, down 14 percent, but the second highest level on record. Farmers' supplies, in particular, were far lower year over year, said Tony Tryhuk, manager of commodity trading at RBC Dominion Securities, who added that farmers may plant less canola this spring.
"Right now there is no alarm bell, but fewer supplies in farmers' hands means prying them will be more expensive as the crop year winds down," he said. "(Commercial) stocks are aplenty so that helps ease concerns for now." Exports of most crops have been strong so far this crop year, contributing to smaller stockpiles, said Chuck Penner, analyst at LeftField Commodity Research. Canada is the world's second-biggest wheat exporter and the largest producer and exporter of canola, used to produce vegetable oil and meal.