WINNIPEG/OTTAWA (Reuters) - Canadian canola supplies fell to a four-year low in early spring, Statistics Canada said in a report on Friday, confirming fears of thin supplies after difficult harvest conditions.
Canola stocks in commercial and farm storage fell 23 percent from last year to 6.6 million tonnes as of March 31, 2017, slightly lower than the average trade guess of 6.7 million tonnes.
Although the estimate was in line with expectations, ICE Canada July canola futures RSN7 extended gains after the report. About 2 million acres of canola, spring wheat and other crops went unharvested in Canada last autumn due to wet weather, and farmers are uncertain if they can salvage that crop before planting this spring.
Statscan’s canola estimate “does confirm a potentially tight situation, depending on how farmers deal with the crop still on the ground,” said Ken Ball, a futures and options broker at PI Financial.
Wheat supplies ballooned, but by less than expected.
Statscan pegged all-wheat stocks at 16.6 million tonnes, up 15.5 percent from last year, but well below the average trade expectation of 18.3 million tonnes. Durum wheat supplies amounted to 4.1 million tonnes, up 51 percent, but short of the average trade guess of 5.2 million.
The smaller-than-expected wheat stocks may reflect a surprisingly brisk pace of durum exports, Ball said. Supplies appear large, but much of last year’s wheat crop was seen as fit only for animal feed, due to disease.
Oat supplies dipped 8.5 percent to 1.7 million tonnes, in line with expectations, while barley stocks climbed 23 percent to 4.6 million, slightly more than expected.
Canada is one of the world’s largest wheat exporters and the biggest shipper of canola, which is used largely to produce vegetable oil.
Reporting by Rod Nickel in Winnipeg and Dale Smith in Ottawa; Editing by Meredith Mazzilli