CNS Canada — With Statistics Canada scheduled to release its stocks report as of Dec. 31 on Tuesday (Feb. 4), most analysts believe the combination of record-large production in Western Canada, and logistical issues transporting that grain, will lead to a very large carryover number for most crops.
“Carryout will likely continue to see record stocks in Western Canada, so we’re not looking at anything friendly out of that number,” Keith Ferley of RBC Dominion Securities in Winnipeg.
According to Agriculture and Agri-Food Canada’s Jan. 24 supply and demand estimates, every grain and oilseed crop is pegged to have higher ending stocks in 2013-14, with wheat and canola seeing the biggest jumps.
The StatsCan report will show supplies at the halfway point of the current crop year.
Despite the expected large numbers, Chuck Penner, president of LeftField Commodity Research, said the StatsCan report is unlikely to be a market mover.
“I don’t think there will be anything in there big enough to really move the markets. We know there’s lots of canola out there, and we know there’s lots of wheat,” he said. “Whether the canola stocks are enormous, or just huge, it isn’t going to move the market.”
“Even if they tinker the numbers, it’s not enough to make us go ‘Oh, I guess it’s actually tight.’ There’s nothing like that in the works.”
Ken Ball, a broker with PI Financial in Winnipeg, said that the report should verify if StatCan’s production estimates in December were on target.
“Obviously the stocks are going to be big, but will they be in line (with production numbers)?” he said. “It’s an interesting report, because when you have such an extraordinary crop number last year, the room for error is huge.”
— Brandon Logan writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.