Canada Faces Record Large Canola Stocks
Accommodating supplies can limit opportunities for U.S. to deliver into Canada
Pre-Wasde Report Estimates: Bullish Soybeans, Neutral Corn
The USDA’s September WASDE is scheduled for release on Thursday, September 12. Focus will be on: corn and soybean yields, harvested acres and carry-out.
Reuters average corn yield estimate: 167.2 BPA, -2.3 BPA from the USDA’s August estimate.
Reuters average corn production estimate: 13.6 billion bushels, -600 MBU from the USDA’s August estimate.
Reuters average 19/20 corn carryout: 2.02 BBU, -60 MBU from the USDA’s August estimate.
Reuters average soybean yield estimate: 47.2 BPA, -1.3 BPA from the USDA’s August estimate.
Reuters average soybean production estimate: 3.577 billion bushels, -103 MBU from the USDA’s August estimate.
Reuters average 19/20 soybean carryout: 2.02 BBU, 660 MBU -95 MBU from the USDA’s August estimate.
FBN’s Take On What It Means: At FBN we believe that the pre-WASDE estimates present a more favorable scenario for soybeans than corn. Declining yield estimates from the government’s August report is widely expected for both corn and soybeans. We also believe that the report can deliver uncertainty into the futures markets.
Canada Faces Record Large Canola Stocks ... Appeals to WTO for Relief
On Friday, Sep. 6, Statistics Canada, StatsCan, released their grains and oilseeds stocks report. The reports showed record volumes of canola and moderate numbers of grains and other field crops.
At 3.8 MMT reported canola stocks were +58% YoY, marking a second year of significant growth and the largest reported stocks on record.
Wheat stocks were estimated at 6.2 million tonnes, -4.6% YoY and the lowest ending stocks since 2015/16.
Canada’s stocks for barley, field peas, flaxseed, lentils, oats, and rye were down incrementally from 2018.
Also on Friday, the Canadian government took its first formal step through the WTO to challenge China’s non-science ban of canola exports which was implemented in March.
FBN’s Take On What It Means: We believe that the latest StatsCan report can be a negative for the U.S. canola producer. We believe that the record large canola stocks can be negative for northern canola basis as opportunities may exist for the Canadian producer to deliver in to the U.S. We also believe that the accommodating supplies can limit opportunities for the U.S. producer to deliver into Canada.
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