Just how tight the canola supplies in Western Canada are will be watched closely when Statistics Canada releases its latest stocks report on Friday (May 3).
The government statistical agency's report will show the stocks being held on farm and in commercial positions as of March 31, 2013.
Canola supplies were already tight in a previous report, with supplies as of Dec. 31, 2012 about two million tonnes below the stocks available at the same time the previous year.
Exporter and domestic crusher demand in the three months between reporting periods was solid, although the pace was slower compared to the previous year, according to Canadian Grain Commission data.
With about 1.8 million tonnes of canola exported between Dec. 31, 2012 and March 31, 2013, and about 1.4 million tonnes crushed domestically, total supplies should decline from the 7.4 million seen at the end of December to around 4.2 million, using the CGC usage numbers.
That doesn't account for feed, waste and dockage, but if realized would represent the tightest Canadian canola stocks, as of March 31, since 2005.
"Stocks reports can contain surprises in tight years," said Ken Ball of PI Financial in Winnipeg. Canola and oats will be the big focus in Friday's report, he said, as the two crops were both already on the tight side in previous releases.
For canola, Ball said usage has not yet slowed down enough to allow for enough of a carryover buffer before the new crop is available.
The trade, he said, will take the updated StatsCan number and work it back to the end of the crop year to determine how much rationing needs to be done to allow for ending stocks of at least 300,000 tonnes.
The stocks data will also provide a clearer picture of 2012 production, which some market participants feel was underestimated.
"The market will watch for the feed, waste and dockage number," said Jerry Klassen of GAP Grains and Produits SA in Winnipeg. If that number is low, it would mean the size of the 2012 crop was underestimated.
Barring a major surprise, the stocks report will likely be a "non-event" for most other crops, said Klassen.
Feed usage was a little higher than expected for wheat in the last report, he said, which would suggest wheat production was overestimated in 2012.
-- Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.