VANCOUVER – May 3/13 – SNS — The quantity of pulses being consumed by Canada’s livestock feed industry is smaller than appeared to be the case, but improved export movement since the start of the calendar year has pulled stocks in all positions down from year earlier levels.
Statistics Canada’s reports there were 2.109 million metric tons (MT) of pulses and specialty crops on hand as of March 31, including 1.593 million MT on farms and 516,000 MT in commercial hands. On farm stocks are down almost 600,000 MT, while commercial inventories are up 189,000 for a net drop of 394,000 MT.
Chickpea and sunflower seed stocks are up over last year; while lentil, pea, canary and mustard seed inventories are down. The biggest tonnage changes are in lentils and peas, with lentil inventories down 247,000 MT and field pea stocks 213,000 MT lower than last year.
Statistics Canada based its estimated on a survey of 13,805 farmers between March 25 and April 3, 2013. Data on peas partly originate from the Canadian Grain Commission. Data on commercial stocks of special crops originate from a survey of handlers and agents of special crops.
Canadian lentil inventories are moving the right direction, but markets were hoping to see a lower number after experiencing a solid increase in export movement since the start of the calendar year.
Statistics Canada found there were 907,000 MT of lentils in all positions, including 750,000 MT on farms and 157,000 MT in commercial shipping positions. Last year, there were 1.08 million MT of lentils remaining on farms and 74,000 MT in commercial positions for a record inventory of 1.154 million. Farmers in Saskatchewan were holding 735,000 MT, down from 1.06 million last year; while farmers in Alberta had 15,000 MT of lentils on their farms, down from 20,000 last year.
Export movement in the January through March period was the second best on record, topping 367,000 MT, with March setting a new record for that specific month. A total of 145,746 MT of lentils cleared Canadian ports in March.
The key disappointment for markets is that the season to date total for inferred domestic consumption is 43,345 MT lower than the December 31 number. This is not unprecedented, but normally the decrease is nominal. More often than not, inferred domestic consumption rises between the December 31 and March 31 stocks in all positions reports.
April’s official export clearances likely remained at high levels, but markets worry that shipments in May, June and July could be closer to average. Demand from the Indian subcontinent has dropped as local markets consume the vast quantities of imported lentils which have recently arrived. Importers are competing for the attention of domestic buyers as well as offering some parcels for resale on regional markets. This has had a direct impact on nominal trading levels for red lentils, which have dropped roughly U.S. $70 per MT since the middle of April.
During the past five years, Canada has exported an average 276,000 MT of lentils between April and July. Exports have ranged between 216,475 and 363,695 MT. Shipments this year are expected to be above average, reaching at least 328,000 MT. Seed usage is forecast at 70,500 MT. Other domestic consumption has averaged almost 24,000 MT, ranging between 1,842 and 44,676 MT in during the past five years.
The numbers suggest that lentil ending stocks will range between 430,000 and 485,000 MT. Getting to the current forecast of a 404,000 MT carryover is only possible if domestic consumption and/or exports reach record levels during the April to July period. Statistics Canada does not break down stocks by class, but usage data so far this year make it clear red lentil inventories will finish the marketing year at 90,000 MT or lower.
Field pea supplies on March 31 totalled 872,000 MT, compared to 1.085 million MT last year. Stocks held by growers fell from 870,000 to 578,000 MT; while peas in commercial hands jumped from 215,000 to 294,000 MT. Inventories on farms in Manitoba were down 2,0000 MT at 8,000; while inventories on Saskatchewan farms dropped from 605,000 to 360,000 MT; and inventories on Alberta farms fell from 255,000 to 210,000 MT.
At this level, inferred disappearance stands at 2.233 million MT during the first eight months of the marketing year, or a record 71.9% of the peas available this season. On a tonnage basis, disappearance is well above the 1.952 million MT consumed during the same period last season, and a major improvement on last year’s usage ratio of 64.3%.
During the previous four seasons, field pea usage during the April through July period has averaged just over 1.0 million MT. It is clearly impossible for usage to reach that level unless onfarm stocks are higher than thought. Significantly, last year’s March 31 onfarm stocks estimate was boosted from and initial estimate of 798,000 to 1.085 million MT.
More importantly, even though the December 31 stocks in all position estimate was left unchanged, it appears to have been higher than first thought. As was the case with lentils, inferred domestic consumption so far this season has decreased since the December stocks report. Usage through the end of March totals 409,818 MT, compared to 459,556 by the end of December.
The March 31 inventory is at the level which would be expected if Canada is to finish the marketing year with 214,000 MT of peas on hand. Exports for the April through July period are expected to total 400,000 MT, while another 241,000 MT should be consumed as planting seed.
The implication of the numbers is that exports have to drop to unusually low levels during the balance of the marketing year. This is only possible if the fraction of peas which have been diverted into domestic livestock feed markets is overstated or Canada had more peas to market this season that initially expected.
During the past five years, field pea exports in the April through July period have averaged 721,212 MT, ranging from a high of 1.03 million MT in 2008-09 to a low of 342,824 in 2007-08. Clearly, Canadian inventories are tight and for the second year in a row the country will be effectively sold out of peas.
Statistics Canada found 111,000 MT of chickpeas on hand in Canada as of March 31, up from 47,000 MT the previous year. Stocks held by growers jumped from 39,000 to 100,000 MT; while product in commercial hands rose from 8,000 to 11,000 MT. Stocks on farms in Saskatchewan total 92,000 MT, compared to 34,000 MT last year; while onfarm stocks in Alberta went from 5,000 to 8,000 MT.
At this level of inventory, inferred disappearance totals 57,500 MT during the first eight months of the marketing year, or just 34.1% of the available supply. This season’s disappearance rate is well below the recent five-year average of 48%.
Inferred domestic disappearance of chickpeas is unusually low. It is roughly 8,075 MT through the end of March, compared to 30,623 last season and the recent average of 33,590 MT. The previous low was 18,630 MT in 2010-11.
During the previous five seasons, chickpea usage the final four months of the marketing year averaged 42,200 MT. Given the March 31 stocks estimate, disappearance needs to soar average for ending stocks to finish around 50,000 MT. Average disappearance would result in a 68,800 MT carryover.
To the extent these numbers are accurate, they help explain why Canadian farmers intend to reduce chickpea seedings, while their counterparts in the United States intend to increase land in the crop. Though opportunities existed to move the crop, Canadian growers appear to have been generally dissatisfied with the price.
Canada is not a “market maker” in chickpeas. International markets are being influenced by the eagerness of Indian exporters to sell in response to ongoing harvest selling pressure by growers. Mexican exporters are holding firm to their price ideas for large caliber product. That is helping maintain the ceiling under which all other origins are pricing product.
Statistics Canada reports there was 56,000 MT of canaryseed on hand in Canada as of March 31, compared to 62,000 MT the previous year. Stocks held by growers fell from 52,000 to 35,000 MT; while seed in commercial hands more than doubled from 10,000 to 21,000 MT.
It is important to note that last year’s March 31 stock estimate was initially pegged at 44,000. Nearly all the 18,000 MT increase was accounted for by higher on-farm stocks.
Inferred disappearance stands at 85,900 MT during the first eight months of the marketing year, or 60.5% of the canaryseed available this season.
Interestingly, while this is the second highest percentage usage figure for canaryseed, it is the lowest tonnage of canaryseed consumed since Statistics Canada started estimating canaryseed inventory. Disappearance averaged 110,200 MT during the previous five marketing years.
During the previous five seasons, canaryseed usage the final four months of the marketing year averaged 77,800 MT — ranging from a high of 95,000 MT in 2009-10 to a low of 45,000 MT last season. It is impossible for disappearance to remain at its average pace during the rest of the marketing year because Canada is short almost 22,000 MT of product.
Clearly, markets need to remain at levels which discourage demand in order to finish with at least 13,000 MT of canaryseed on hand.