Canadian wheat stocks are set to hit a record low next season, after a period of heavy exports spurred by the weakness in the Canadian dollar, US officials said.
The US Department of Agriculture’s Ottawa bureau forecast Canadian wheat stocks to fall to 3.754m tonnes by the end of the 2016-17 season.
This would be the lowest level of wheat stocks since the start of records in 1960, despite a slowing of exports and an uptick in production.
The report comes ahead of fresh data from the Canadian Bureau, which will shed light on the size of wheat stocks as of March.
Exports to decline
The USDA’s Ottawa bureau revised down its idea of current wheat stocks, seeing ending stocks for the 2015-16 season at 3.854m million tonnes, some 506,000 below the official USDA forecast.
Total wheat exports were seen declining to 20.5m tonnes, as inventories run dry.
“The strong export pace continues, as a weak Canadian dollar buoys exports, but the pace is expected to slow over the summer months as supplies tighten,” the USDA said.
The weak loonie gives an incentive to ship grain overseas, increasing US dollar revenues.
Plantings down, but production could recover
Based on the plantings statistics published by Statistics Canada, total wheat sowings are seen falling 1.3%, as a falling soft red spring wheat sowings is partially cancelled out by a rapid increase in winter wheat and durum wheat sowings.
Sowings of durum and winter wheat are up 5.2% and 25.9% respectively, while sowings of soft red spring wheat are seen falling by 5.7% year on year.
Soft red spring wheat remains by far the most common variety of wheat sown in Canada.
But the decline in sowings will be more than offset if conditions allow yields to recover from the below-average levels seen in the previous season.
Based on average yields, the sowings forecast would still see wheat production at 28.7m tonnes, up 4.0% year one year.
Fresh data release
Statistics Canada will on Friday release its estimate of grain stocks.
A survey of analysts suggested market are expecting wheat stocks of 13.8m tonnes, as of March 2016.
The Canadian wheat marketing year runs from August to July.
(Source – http://www.agrimoney.com/news/canadian-wheat-stocks-to-hit-all-time-low–9541.html)