Canada canola, wheat stocks fall more than expected

Fri Sep 7, 2012 11:04am EDT
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By Rod Nickel

WINNIPEG, Manitoba (Reuters) - Canadian stocks of canola and wheat fell more sharply than expected at mid-summer from a year earlier, Statistics Canada said on Friday, whittled down by strong export demand.

Canola stocks fell to 788,000 metric tons (868,621 tons) from 2.2 million tonnes, while all-wheat stocks in commercial storage and on farms dipped to 5.879 million tonnes from 7.2 million tonnes.

As of July 31, the end of the 2011/12 marketing year, canola stocks dropped to an 8-year low, while all-wheat supplies were the smallest in four years.

Traders surveyed by Reuters, on average, expected canola stocks of 1 million tonnes and wheat supplies of 6.1 million tonnes.

"(Canola) is pretty close to expectations but it's certainly tight, the lowest we've seen in a long, long time," said Ken Ball, commodities broker at Union Securities.

"The canola number should be supportive, given that we have a crop (production) number that is shrinking daily in people's minds."

Canola yields across much of the Canadian Prairies have been disappointing in the harvest so far. Canada is the biggest grower and exporter of the oilseed, which is mainly used to produce vegetable oil and meal for livestock feed.

Although the Statscan data looked bullish, ICE Canada canola futures were down after the report due to weakness in Chicago soybeans and with farmers harvesting the new canola crop, a trader said.   Continued...