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StatsCan: Wheat supplies tight, canola stocks big

(Resource News International) There were few surprises in the Statistics Canada report on grain stocks in all positions for the period ended July 31, the end of the 2006-07 crop year. The exceptions to the rule, however, were tighter-than-expected wheat supplies and canola stocks a bit larger than anticipated.

“The all wheat supply estimate was definitely on the tight side,” confirmed Mike Jubinville, an analyst with the farmer advisory service, ProFarmer Canada. “The number probably drew extra attention because of the tight global wheat supply situation.”

Statistics Canada pegged all wheat supplies in Canada at the end of 2006-07 at 6.828 million tonnes. This compared with pre-report estimates that ranged from seven million to eight million tonnes. All wheat supplies at the same time in 2005-06 totalled 9.638 million tonnes.

The government agency said the lower wheat stocks were the result of above-average export demand brought on by the tight world supply and demand situation.

Ken Ball, a broker with Union Securities, agreed that supplies of wheat in Canada were tight, but the supply tightness in Canada may be offset by talk of higher than expected yield potential from wheat crops in central and northern Alberta.

“We are hearing of extremely above-average yields in those regions,” Ball said. “The problem, however, is that the crop is late in maturity and in turn the quality may be downgraded by frost.”

He said the frost should not affect the yield potential, but quality may be another story.

Statistics Canada pegged canola supplies as of July 31 at 1.820 million tonnes, which was at the high end of pre-report ideas that ranged from 1.3 million to 1.8 million tonnes. Canola supplies at the end of the 2005-06 crop year totalled 2.007 million tonnes.

“The estimate for canola definitely was a bit bigger than had been expected,” Jubinville said. However, he said, the larger supply of canola was likely attributable to the juggling of the previous canola carryout projections because of updated census data.

Ball said the bigger than expected canola estimate would be absorbed eventually by strong global demand for the commodity during the 2007/08 season.

The stock estimates for barley and oats were both seen as neutral, falling within pre-report expectations.

Statistics Canada pegged barley stocks as of July 31 at 1.492 million tonnes, which compares with pre-report ideas that ranged from 1.300 million to 1.750 million. At the end of 2005-06, barley supplies in Canada totalled 3.289 million tonnes.

Oats supplies as of July 31, totalled 556,000 tonnes, in line with pre-report expectations that ranged from 500,000 to 725,000 tonnes. Oats supplies at the same time a year ago totalled 872,000 tonnes.

Flaxseed supplies were seen as more than adequate by both Ball and Jubinville. However, they both indicated that strong export demand for flaxseed during 2007-08 should help to absorb some of the extra supply.

Jubinville said in terms of the numbers for special crops, the estimates for both peas and lentils were extremely tight.

Statistics Canada pegged dry pea stocks at the end of July at 205,000 tonnes, compared with 440,000 at the same time the year previous. Lentil stocks as of July 31 were 139,000 tonnes compared with 475,000 the previous year.

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