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Pulse Market Insight #143 FEB 13 2017 | Producers | Pulse Market Insights

Gleanings from the StatsCan Stocks Report

At times, the folks working at Statistics Canada must feel a little bit like Rodney Dangerfield. For all the work they do, they still “get no respect”. True, they don’t always get things right but a large part of that is related to the old computer programmers’ maxim of “garbage in, garbage out”.

Over the years, I’ve had lots of discussions with farmers who question why StatsCan reports are needed, with the underlying suspicion that they only benefit grain traders. My response is that grain companies have their own ways to gather information. Meanwhile, most farmers have nothing other than the local coffee shop and more recently Twitter, and neither of those sources is sufficient. That’s why it’s in their interest to have reliable StatsCan reports. And just in case anyone’s wondering, I’m not on some secret StatsCan payroll.

Of all the reports, the December 31 stocks estimates are probably the most ridiculed of the StatsCan releases. Even so, it’s useful as a means of double checking some of the production estimates and getting a handle on usage through the first five months of the marketing year. True, they’re not bulletproof either, so allowing for their shortcomings is important. And some colour commentary is normally needed too.

For peas, farmers told StatsCan they had 2.4 million tonnes still in the bins on December 31 and another 268,000 tonnes were in commercial hands. That’s not the largest total on record, in spite of the record 2016 pea crop of 4.84 million tonnes. As a result, these stocks aren’t seen as overly burdensome. What we don’t know however, is how many of these peas are yellows and how many are greens, another piece of the puzzle. Price relationships suggest yellow pea stocks are relatively tighter than greens.

What the stocks number tells us is that over 2.3 million tonnes of peas had already been exported or consumed domestically by the end of December. That’s a new record by a wide margin and provides room for optimism. That said, exports and domestic (feed and seed) use will need to remain strong for the rest of 2016/17 to avoid heavy ending stocks.

When it comes to lentils, the stocks picture shows a large increase in inventories over last year, but within the ballpark of the previous five years. Farmers’ inventories were 1.56 million tonnes and commercials held another 200,000 tonnes. The important caution when looking at these stocks is that a larger than usual portion, maybe as much as 300,000 tonnes, are Sample grade lentils. That reduces the exportable supplies, making that picture slightly tighter.

Over the first five months of 2016/17, 1.6 million tonnes of lentils had either been exported or consumed domestically. That’s quite impressive but actually slightly below last year’s 1.7 million tonnes of usage. With fairly normal exports along with seed use and some livestock feed consumption for the rest of 2016/17, ending stocks of lentils (especially better quality) shouldn’t end up very heavy.

Unfortunately, StatsCan has stopped gathering data about on-farm inventories of chickpeas or dry beans, because those crops are smaller. That makes it harder to gauge supply estimates and provide market outlooks. As a result, we have to rely on anecdotal reports and price behaviour for clues about those supply levels.

Pulse Market Insight provides market commentary from Chuck Penner of LeftField Commodity Research to help with pulse marketing decisions.