Canola futures nudged higher, returning above Can$500 a
tonne, after Canada revealed that its stocks of the oilseed had shrunk even
further than had been thought, sapped by strong export demand.
Canada's canola inventories dropped by 36% to 1.35m tonnes
over 2016-17, on an August-to-July basis, Statistics Canada said.
The decline, which left year-end inventories at their lowest
in four years, was steeper than expected by investors, who had forecast a 1.5m-tonne
And it reflected in particular a drop in on-farm inventories
of the rapeseed variant, which slumped by 57%, compared with a 16.6% drop in
The data follow a strong period for Canadian exports, the
world's biggest, which the International Grains Council pegs at a record 11.1m
tonnes over 2016-17, a rise of 800,000 tonnes year on year.
Orders were supported by strong global import demand from
the likes of China which, in the face of squeezed domestic supplies, backed
down on plans to bar imports from Canada, over disease worries.
The IGC estimated Chinese imports rising by some 300,000
tonnes to 4.3m tonnes over 2016-17, while a report from US Department of
Agriculture staff overnight put them at 4.1m tonnes.
The European Union also turned to international markets for
more of the crop, after seeing its own rapeseed output drop to levels some 5m
tonnes short of consumption needs.
Canola, spring wheat
The StatsCan data also imply that Canada's canola stores are
more depleted than had been thought ahead of a harvest which, according to official
estimates last week, will also fall short of forecasts.
Canola futures for November, which had showed small losses
in the run-up to the data, recovered to Can$500.20 a tonne in late deals in
Winnipeg, a 0.6% gain on the day, and putting the contract back above its
100-day and 200-day moving averages.
By contrast, the StatsCan report showed Canadian wheat
inventories at the close of 2016-17 at 6.87m tonnes - a 33% surge year on year,
and ahead of the 6.0m-tonne figure expected by investors.
Nonetheless, Minneapolis spring wheat futures for December,
after an initial setback on the data, recovered to stand at $6.41 ¼ a bushel in
late deals, a rise of 2.0% on the day, on course for its first winning session