Canada Markets

A media piece this week focused on Canada's potential in the year ahead, with the country's wheat stocks potentially highly sought after given a year-over-year tightening of global exportable supplies forecast for 2018/19. Oilseeds such as canola and soybeans may also be sought-after by China in bigger volumes, given a shift away from U.S. soybeans due to the current trade war and tariffs imposed on U.S. imports.

The supply chain will face a test, with both railroads targeting to increase performance following a particular difficult crop year faced by one of Canada's two major railways. Demand for oil by rail continues to grow at the same time.

The Canadian Grain Commission's week 3 data shows weak data for in transit supplies of grain on western rail relative to the same week last crop year and the five-year average for week 3. This is despite this week's Saskatchewan Crop Report showing harvest well-ahead of average pace, with 16% estimated to be harvested as compared to the five-year average of 7%. Alberta's harvest pace is slightly behind average, with an estimated 6.5% harvested as compared to the five-year average of 7.3%.

The Canadian Grain Commission's week 3 grains in transit on western rail shows no signs of urgency in placing grains in position in export terminals. As of Aug. 19, or the end of week 3, in transit stocks of all grain on western rail totaled 240,700 metric tons, down from the volume reported the same week last crop year of 410,900 mt and is down 51.5% from the five-year average of 496,100 mt.

Of the selected commodities shown, only the current in-transit stocks of oats and barley are reported higher than their respective five-year average. At 122,300 mt, in-transit stocks of wheat are 55.7% below the same week last crop year and 58.4% below the five-year average for this week. In transit, stocks of canola, at 69,800 mt, are 17% higher than this week last crop year but 9.4% lower than the five-year average for this week.

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Cliff Jamieson can be reached at cliff.jamieson@dtn.com

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