Canola futures nudged higher to return to positive territory after Canada revealed that its stocks of the oilseed had fallen even further than had been thought, sapped by strong export demand.
Canada’s canola inventories dropped by 36% to 1.35m tonnes over 2016-17, on an August-to-July basis, Statistics Canada said.
The drop, which left year-end inventories at their lowest in four years, was steeper than expected by investors, who had forecast a 1.5m-tonne figure.
And it reflected in particular a drop in on-farm inventories of the rapeseed variant, which slumped by 57%, compared with a 16.6% drop in commercial stocks.
The data follow a strong period for Canadian exports, the world’s biggest, which the International Grains Council pegs at a record 11.1m tonnes over 2016-17, a rise of 800,000 tonnes year on year.
Orders were supported by strong global import demand from the likes of China which, in the face of squeezed domestic supplies, backed down on plans to bar imports from Canada, over disease worries.
Chinese imports rose by some 300,000 tonnes to 4.3m tonnes, on IGC estimates.
The European Union also turned to international markets for more of the crop, after seeing its own rapeseed output drop to levels some 5m tonnes short of consumption needs.
Canola, spring wheat prices
The statistics also mean that Canada’s canola stores are more depleted than had been thought ahead of a harvest which, according to Statistics Canada data last week, will also fall short of forecasts.
Winnipeg canola futures for November, which had showed small losses in the run-up to the data, recovered to Can$497.80 a tonne immediately after the report, a 0.1% gain on the day.
By contrast, Minneapolis spring wheat futures for December lost some of their losses, easing back to $6.32 a bushel, a 0.5% recovery on the day, after the StatsCan data showed Canada’s wheat stocks at the close of 2016-17, at 6.67m tonnes, rising 33% year on year.
That was above the 6.0m-tonne figure expected by investors.
(Source – http://www.agrimoney.com/news/canadas-canola-stocks-fall-to-four-year-low.-wheat-stocks-rise–10997.html)