Canola exports slow due to lack of supply, Not demand

[Herc]

what are the stocks of corn and soybeans in the states? All I see is 300 bpa corn being harvested down there.

[TechAnalyst]

Sounds weird. If there’s demand and not a lot of product why aren’t bids rising? They just waiting it out to see what actual production comes out of Canada?

Yes, they were just patiently waiting for harvest to begin it appears. It wouldn't have sped it up to increase price and the long range forecast looked good for the western prairies to get rolling.

And just to be clear, the original post was meant to say nothing about the eventual supply and demand - combines and China will weigh in on that - just pointing out that nothing should have been read into the slow pace of exports for the first 5 weeks of the marketing year. Other than it suggests July 31 stocks are likely as tight as Statistics Canada suggested.

[TechAnalyst]

what are the stocks of corn and soybeans in the states? All I see is 300 bpa corn being harvested down there.

Old crop corn stocks are tight, just estimated by the USDA at 1.325 billion bushels (bb). New crop ending stocks estimates are higher at 2.11 bb based on a national average yield of 186.7 bpa - way above last year's record of 179.3 bpa. Given a record setting late season drought south and east of Iowa and heavy disease pressure in the western corn belt, many are growing skeptical that the yield will even match last year. Based on 90 million harvested acres, that would take 666 million bushels (mb) off production (if the final is 179.3). A similar situation developed in 2020 when a big jump into new record high yield was predicted in August by satellite imagery based models, only to have the final yield being much below the previous year.

Soybeans are the real concern given a 7 million acre cut to plantings. The only thing holding price back is China's apparent boycott of U.S. soybeans. Old crop carryover was just estimated to be 330 mb by the USDA with new crop expected to fall to 300 mb - based on an all time record yield of 53.5 bpa compared to the previous record set in 2016 at 51.9 bpa and last year's 50.7 bpa. With August and September being the yield determining stage for soybeans due to the importance of seed size, it is likely as unanimous as can be that future yield estimates will be lower. Just by how much. (50.7 bpa matching last year would take 225 mb off production, or much of the carryover estimate) The problem is, that tight ending stocks estimate is already based on a 190 mb cut in exports due to China's absence. Export sales to date are ahead of the pace needed to reach the current estimate. There is no room of yield to fall and/or China to start buying aggressively as part of some sort of trade deal.

My 2 cents for what it's worth...