There’s less canola and wheat left from last year’s bumper crop than traders and analysts thought, according to the Statistics Canada stocks report released on Friday morning.
Wheat stocks as of July 31st were pegged at 9.8 million metric tonnes, up 94 percent from the same time last year, but generally below expectations.
Canola supplies were reported at 2.4 million tonnes — a four-fold increase from the same date in 2013, but also lower than the trade was anticipating.
Ken Ball, a Winnipeg-based options broker with PI Financial, says the canola stock number stood out the most.
“It’s probably about 300 to 350 thousand tonnes below expectations,” he says. “It’ll keep traders a little more on the edge of their seat.”
While canola values will remain under pressure from the large US soybean crop, Ball says the tighter than expected old crop supplies will provide some support.
“There’s still a lot of uncertainty surrounding how big this canola crop is,” he notes. “It may be difficult for it to actually cause canola prices to go up if the soy environment stays weak, but it may underpin prices to some degree until we see how big the crop is.”
Here’s Kelvin’s conversation with Ken Ball:
Listen here if you can’t see the audio player.