Canada Markets

An increase in grain imports into the United States is expected this crop year, given USDA's estimates, while Canadian Grain Commission data for the first 11 weeks, or 21% of the crop year, shows movement direct from Prairies elevators off to a quick start in meeting this demand.

The USDA's latest October supply and demand estimates points to expected all-wheat imports of 149 million bushels, or 4 million metric tons. This is up 27.4% from last crop year. This increase can be broken down to 105 mb or 2.9 mmt of wheat excluding durum (20.7%), 73 mb or 2 mmt of hard red spring wheat (73.8%) and 44 mb of durum or 1.2 mmt (46.7%), with the year-over-year change indicated in brackets. Imports of barley are forecast at 15 mmb or 327,000 mt, up 50% from last crop year, while imports of oats are forecast at 100 mb or 1.5 mmt, up 11% from last year.

Of the five selected commodities, the attached chart shows cumulative export shipments direct from prairie elevators of wheat (excluding durum), durum and oats (blue bars), well ahead of the pace achieved in 2016/17 (brown bars) and as well as ahead of the five-year average (grey bars). Movement of barley is ahead of the 2016/17 pace, while movement of canola is behind both last year and the five-year average. This is as of week 11, or the week ending Oct. 15.

Of the five commodities selected, the pace of oat movement stands out relative to last year and the five-year average for the first 11 weeks and may be the most likely to result in an upward revision in U.S. imports. To-date, 348,900 metric tons has been shipped direct from elevators on the Prairies, up from 264,500 mt over the same period in 2016/17 and the five-year average of 240,300 mt. This volume extrapolates to crop-year movement of close to 1.7 mmt, higher than current USDA forecast.

The Ag Transport Coalition's Weekly Performance Update for week 11 shows a high level of performance on the part of Canada's two railways when it comes to shipping into the U.S. The total hopper supply by corridor to week 11 shows CN supplying 95% of the cars in demand for U.S./Mexico shipment, while CP has met 93% of their demand. Of the six shipping corridors monitored by the report, the USA/Mexico is shown to be the fourth largest in terms of demand for shipping so far this crop year. The overall unfulfilled demand for U.S. shipping is calculated at 6.7% of total unfulfilled demand, or just 368 cars of the total unfulfilled demand for all corridors of 5,490 cars.

Total demand for railcars for U.S. shipping is indicated at 6,144 cars, up 75% from the 3,515 ordered in the same period last crop year.

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