02-07-2013 07:56 PM
As the U.S. oilseed market focuses on dwindling stocks of soybeans, Canadian oilseed analysts are talking about running out of canola.
As of Dec. 31, 2012, Canadian canola stocks of 7.4 million metric tons were 23.6% lower than a year ago, according to a report released by Statistics Canada, Feb. 5. The stocks figure puts canola stocks in Canada at their lowest level for any December since 2006.
"We have to start rationing canola," says Wayne Palmer, senior market analyst with Agri-Trend Marketing, Winnipeg. Palmer was one of two analysts on a press call following the release of the report.
"It looks like we will run out of canola," Palmer states.
While canola stocks came in at the high end of trade estimates, Palmer says stocks are irrelevant. Over the past three weeks, Canadian canola prices have surged $55/ton.
"Canola prices will continue to tag along with the soybean market," Palmer says.
Canola production of 13.3 million metric tons in 2012 was a 9% drop from 2011 output of 14.6 million tons. Lower-than-expected canola production was the result of reduced yields from a growing season marked by warm temperatures, moisture stress, and disease.
Wheat and other grains will likely replace canola during planting, says Palmer. "Producers will look to crops that are not as frustrating to grow," he says.
Canada’s Agriculture and AgriFood Canada farm ministry recently released data that showed Canada producers are expected to plant 100,000 fewer acres to canola in 2013, a 1.3% decrease from last year.
Total wheat stocks as of December 31, 2012, fell 0.7% to just under 20.7 million metric tons, compared with a year earlier. On-farm stocks of wheat rose 1.7% to 16.5 million metric tons, while commercial stocks fell 9.1% to 4.2 million tons, according to Statistics Canada.
"Wheat stocks are 1 million tons below expectations," says Brian Voth, senior market coach with Agri-Trend Marketing. "Elevators are saying by the end of March they won’t have any more wheat."
On-farm stocks of soybeans in Canada decreased 25.6% to 1.3 million metric tons, while commercial stocks rose 36.5% to 1.1 million metric tons, their highest level since 2006. That left total stocks of soybeans at 2.4 million metric tons, a 6.7% year-over year decline—despite a 14.7% production increase in soybean production in Canada in 2012.
Total stocks of corn for grain in Canada, however, are at a record high of 10.4 million metric tons, a 9.8% increase over the previous year, following record production of 13.1 million metric tons.
02-07-2013 10:10 PM
The local bean processor---Wichita ks------- had quite a package of incentives to encourage folks to get their beans in to the plant this morning. Things I have not heard before.
They will handle the trucking costs at lower rates
unpriced soybeans carried storage free until September 2013 if delivered in Feb.
Hobby, it sounds like tight supply to me.
02-07-2013 10:23 PM - edited 02-07-2013 10:30 PM
Yep: the four color system...
Green..Grain piled in the streets
Yellow..Grain almost half up the sides of the bins
Orange..Grain in the bins but low
Red.. Augers rattling
Harvest for many in North America is some time off yet.
Step right up and get yours while there is still some left.
Pushing and crowding to the front is fine.
Just bring money, that would be devine.
02-08-2013 05:37 AM
One way to gauge the tightness of oilseed supply is to look at how far out they are willing to contract meal (basis)
when things get really tight, the processor will not sell very far out on the curve as they do not know what kind of basis it will take to buy the last of the beans, or if they can find them...
there is usually a lot of communication between the bean processor and their biggest meal customers about what the customer is willing to pay (in the form of meal basis) so the processor can try to source the beans....
just something to keep an eye on as bean inventory shrinks through the spring and summer
02-08-2013 06:28 AM
What is interesting to me is that they made no mention of how much there sells increased for Canola .
The reason I brought this up , 2 years ago I raised 100% Low Lin beans for Bunge , then last year zero ! Soybean oil held a large market share until food manufactures started moving away from hydrogenated oils due to labeling and nutrition issues .
According to a article in Growing Point Mag. " With the labeling issue the S-bean oil market lost equal to 8 million acres of soybeans .
When I was told that I would not be raising any low lin beans , they said that It would only be short term , that the bean industry was comeing out soon with a new bean to play with Canola oil . And from what I have read lately is that Pioneer has come up with one .