Statcan stocks report released today

[charliep]

An interesting report (at least for analysts). Bigger canola July 31 number than - likely underestimated the size of the 2009 crop. Bigger cereal grain number as well - livestock feed consumption down reflecting reduced numbers. Markets are concentrating on weather so will ignore todays report.

[URL="http://www.statcan.gc.ca/daily-quotidien/100908/t100908b1-eng.htm"]July 31 stocks report[/URL]

[charliep]

I have to highlight the negative feed waste and dockage on canola. Canala is interesting in that there is basically a full accounting of numbers give almost all enters the commercial system and is officially recorded by CGC (important on a whole bunch of levels including farmer security of getting paid).

If canola production is underestimated, things all will come out in the wash eventually - no hiding. Grain is different in that feed use is significant volume and a residual given no way of keeping track of on farm use or sales to unlicensed buyers.

So there is an extra 800,000 plus of canola production from last year.

[countryguy]

How convenient isn't it? Statscan is nothing more than a price adjusting tool.

[fjlip]

When China "found" a pile of corn to drive down the market we laughed at communism. Who are the dummies in this case?

[charliep]

Number will be ignored today given the impact of weather on 2010 yield and quality. The unanticipated inventory will have a customer in 2010/11 - it will not impact your price except maybe for a short period today although largely ignored so far.

In the case of canola, the number highlights some anomolies of our Canadian system.

Everyone in these threads watchs the production side. Perhaps the most amazing thing this year (at least for oilseeds and coarse grains) is the fact the demand (likely should call consumption) is the factor driving prices. The real sad thing is western Canada will not participate in this because of the weather issues.

[charliep]

Actually you had better look at China and corn in the next 3 to 5 years from a policy perspective. Changes are occurring.

[sumdumguy]

Like what changes? If its increased production then potash up.

[charliep]

A decision to switch from an irregular corn exporter to a full time corn importer. Target increased livestock production to provide for increased domestic meat consumption and yes I said it, some ethanol production. Fuel for the ever increasing number of cars and DDG as an alternative protein source for livestock.

Lots can happen but watch direction. Note the impact of China on the soybean market.

[IAMTHEMOLE]

Barley numbers does not surprise me as there has been an unusual amount of old crop looking for a home in the last month. Short term barley can't rally but once harvest is done, if it gets done, and any piles get cleaned up it should rally pretty strong. Tough to see the price of wheat dropping over the next year therefore malt and feed barley will remain at levels to compete with wheat acres. Not sure what cattle feeders can pay for barley with current fat cattle prices of 90 cents but if fats rally so will barley. $4 a bushel seems like a foregone conclusion but will be difficult to get much higher prices for barley if finished cattle and hogs don't rally. JMHO