Smaller Canadian canola and wheat crops in 2015-16 should keep some extra attention on the carryout from the previous crop year, when Statistics Canada releases its ending stocks report on Thursday.
However, barring any surprises in the data, current weather and production prospects should remain the major drivers in futures markets.
Canola ending stocks, as of July 31, are forecast at anywhere from 800,000 to 1.7 million tonnes, with most estimates leaning toward the higher end of the range. That would compare with the 2.4 million tonnes carried over from the previous crop year.
With production in 2015-16 generally expected to come in at least a million tonnes below the 15.6 million grown in 2014-15, “the market will be quite sensitive to the canola stocks number,” said Jerry Klassen, manager of the Canadian office for Swiss-based GAP S.A. Grains and Products.
There were heavy farmer deliveries of canola late in the crop year, which may be a sign that the on-farm stocks weren’t as tight as originally thought and the 2014-15 crop was larger than reported, according to some analysts.
However, no matter the stocks number, canola supplies will still be tight overall, which will require the market to develop some sort of premium relative to other oilseeds, according to Mike Jubinville of ProFarmer Canada.
Looking at wheat, ending stocks are estimated at 5.1 million to 7.1 million tonnes, which compares with ending stocks of 10.4 million tonnes the previous year. Durum is expected to account for 800,000 to 1.2 million tonnes of the wheat total, which would be below the 1.8 million tonnes seen in July 2014.
Neil Townsend, market analyst with G3 Global Grain, said the lower-quality durum crop grown in 2014 may have seen more of that crop diverted into feed channels, which could cut into the stocks number.
Klassen said much of the leftover spring wheat will also be of lower quality, which should limit the effect the report has on milling wheat futures.
Source : AlbertaWheat