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Canadian canola stocks bigger than expected, wheat less ample

Canadian stockpiles of canola were larger than expected at the end of 2015, but wheat was less abundant, and supplies of both shrank year over year, according to a Statistics Canada report on Thursday and an industry poll.

The year-end stocks report was of particular interest to the oilseed industry this year, due to a wide divergence of views among traders and analysts about the size of last autumn's canola harvest.

Statscan, using a farmer survey, pegged canola stocks in commercial and on-farm storage as of Dec. 31, 2015 at 12.1 million metric tons, down four percent year over year and the smallest in three years.

The stocks report is a snapshot of supply a few months after harvest that the trade uses to confirm whether the crop was larger or smaller than previously reported.

Traders and analysts in a Reuters survey were expecting, on average, 11.5 million.

"Supply has gotten bigger, but our demand expectations have increased as well" for canola, said Jonathon Driedger, senior market analyst at FarmLink Marketing Solutions, adding that crushing volumes were ahead of last year.

ICE Canada March canola futures dipped 0.7 percent at C$468.50 per metric ton.

All-wheat supplies fell 19 percent to an eight-year low of 20.7 million metric tons. They were smaller than the average estimate of 21.8 million.

Canadian wheat exports have been brisk, helped by a weak Canadian dollar, and supplies may run thin by summer, Driedger said.

"Of course the balance of that is the world is awash in wheat."

Canada is the third-largest wheat exporter and the biggest shipper of canola, used mainly to produce vegetable oil.

International Grains Council last month raised its estimate of world wheat production by 5 million metric tons to 731 million.

Durum stocks rose three percent to 4.2 million metric tons, slightly more than the average trade estimate of 4 million.

Statistics Canada pegged barley stocks at 5.7 million metric tons, up four percent and a bit higher than expectations for 5.4 million. Oat supplies amounted to 2.6 million metric tons, about the same as a year ago and matching the average trade estimate.