Statistics Canada July 31 Stocks Report

[charliep]

Statistics Canada released their July 31 estimates of grain and oilseed stocks. A summary is located at:

http://www.statcan.ca/Daily/English/030908/d030908b.htm

Wheat total stocks are tight but expected. Barley are also tight at 1.4 MMT but many in the trade had looked for this number to be even higher. Canola at 900,000 t is monsterous - the 2002 production number is substantially under estimated.

The market will ignore these numbers with the exception of canola (negative canola).

[charliep]

Barley should be even lower (some thinking closer to 1.2 MMT).

[rain]

Charlie I hear you about the canola production mbeing uderestimated last year. Back in January statscan adjusted the numbers for waste and dockage and made for one of cleanest canola crops on record. While out in the country the dockage numbers where huge on a percent basis.

Is statscan out because producers are not giving true numbers when being interviewd?

[melvill]

rain, I don't know what proceedures StatCan uses to make certain that the degree of error in their surveys is as low as possible but I do know that they must get a lot of "wrong" info from producers. I talk to quite a few farm groups and, invariably, when StatsCan comes up one or two will talk about how they deliberately give misinfo on the phone or mail-in surveyers. Many in the audience agree that they do the same thing.

I'd really like to hear a good, persuasive argument that would convince producers that they're only hurting themselves by giving false info. Got any good ideas?

[rain]

We need to tell producers that in order for them to be more profitable they need access to correct #s. I watch the government numbers for exports and crush and have found them to be generally good.

The next time a producers starts to whine about the market (barley, wheat canola etc) turning against them, and they complain they did nothing because the market said to do other wise we can ask how many of you gave true numbers.

I love to hear the paranoia of producers against the governmnet yet they will tell big grain companies everything.

I not a Liberal, and I am not NDP but I think I would trust the Governmnet in this situation more then the grain companies.

[charliep]

Don't know the answer to whether provide accurate information. My thoughts are there needs to be a review of how data (both statscan and cgc) are collected and analysed. Of concern outside statscan is the commercial canola stocks number of 544,000 t from cgc - is this number real.

Equally important to me is the amount of inventory that is being held over in a year of high prices that tailed off during the year. Many times prices increase because they get could short the market (struggle to get grain up the elevator driveway for sales they have made). Farmers demand and get paid premiums. Grain companies then get paranoid and don't sell unless they have physical stocks in their elevator system. Farmers are bullish and don't deliver. No sales are made and crops sit in the bins. Business that would have been done here goes to other exporters or commodities or is simply lost. Inventories at the end of the crop year are relatively large.

A favorite expression of mine is "Bull markets have long tails".