Discrepancy shows up in wheat ending stock estimates

There is a big discrepancy between Agriculture Canada and the U.S. Department of Agriculture regarding Canada’s estimated 2022-23 wheat ending stocks.

Agriculture Canada is forecasting 6.2 million tonnes of all wheat ending stocks, while the USDA is substantially lower at 4.17 million tonnes.

That is a critically important difference because ending stocks are highly correlated with price.

MarketsFarm analyst Bruce Burnett said part of the variance can be explained by methodology.

Agriculture Canada uses the Canadian crop year that spans from July 1, 2022, to August 31, 2023. The USDA is using the international crop year that runs from June 1, 2022, through May 31, 2023.

But that means the USDA’s ending stocks number should be bigger than Agriculture Canada’s because the Agriculture Canada number includes two more months of exports.

If stocks are indeed at 4.17 million tonnes on May 31, 2023, as the USDA is suggesting, then Agriculture Canada’s number should be even lower after subtracting June and July exports.