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Canada Wheat Inventory Drops on Exports, Local Demand

(Corrects third paragraph to say consumption were the highest since 2002.)

Feb. 5 (Bloomberg) -- Wheat stockpiles in Canada, the world’s largest exporter after the U.S., slid to a five-year low at the end of December as domestic demand and overseas shipments outpaced gains in output, government data show.

Inventories of all wheat varieties totaled 20.69 million metric tons on Dec. 31, down 0.7 percent from 20.83 million tons a year earlier and the lowest for that time of year since 2007, Statistics Canada said today in Ottawa. Canola stockpiles plunged 24 percent, dropping for a third straight year, to 7.37 million tons, the lowest in six years, while corn reserves surged 9.8 percent to a record 10.365 million, the agency said.

Even as farmers boosted wheat production by 7.6 percent last year to 27.2 million tons, aided by favorable weather, exports rose for a second straight year and domestic consumption was the highest since 2002, government data show. Stockpiles of durum wheat, used to make pasta, fell 4.1 percent to 3.83 million tons, while other varieties increased.

“The wheat stocks number was mainly lower because of the durum number,” Brian Voth, senior market analyst at Agri-Trend Marketing Inc., said in a conference call following the data release. “Durum threw off the all-wheat number.”

The data may not yet reflect all the wheat that has been sold, because some farmers are indicating they won’t have any grain available by March, Voth said.

More Planting

“The sharp rise in all-wheat Canadian exports drawing down supplies this early in the year could boost 2013 planting intentions up by 3 to 5 percent from 2012, as tight inventories will keep wheat prices at an attractive level,” Terry Reilly, a senior commodity analyst at Futures International LLC in Chicago, said in a telephone interview.

Wheat futures on the Chicago Board of Trade were up 15 percent through yesterday from a year earlier, after reaching a four-year high in July.

Stockpiles of wheat on farms rose 1.7 percent to 16.5 million tons, compared with a year earlier, while commercial inventories plunged 9.1 percent to 4.2 million tons, the agency said.

Barley inventories slid 7.2 percent from a year earlier to 5.09 million tons, Statistics Canada said.

The report was based on a survey of 10,435 farmers, which was taken from Jan. 4 to Jan. 13.

To contact the reporter on this story: Katia Dmitrieva in Toronto at edmitrieva1@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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