Canada Markets
Dry Pea Forecast Will Test the Availability of Supplies
The April Canada: Outlook for Principal Field Crops report released by Agriculture and Agri-Food Canada included an upward revision in the forecast for dry pea exports, increased by 100,000 metric tons to 3.6 million metric tons for 2019-20. Since the first forecast for the 2019-20 crop year was released in January 2019, this forecast has been revised higher six times, while increasing 28.6% overall from 2.8 mmt to the latest 3.6 mmt forecast. This compares to the record 3.944 mmt shipped in 2016-17.
This resulted in a downward revision in the ending stocks forecast by 100,000 mt to 325,000 mt, very similar to the 312,000 mt carried out of 2018-19 and is 23% below the five-year average. The current pace of movement will put previous stocks estimates to a test in the months to come.
As of week 37, or the week ending April 19, the Canadian Grain Commission reports 1.7876 mmt exported in 2019-20, the largest volume moved over this period in three years. This pace is 27.4% higher than the same period in 2018-19, while 4.3% lower than the five-year average for this period.
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When the pace of movement over the past five years is considered, we see that on average the week 37 exports through licensed facilities accounts for 58.2% of total crop year exports. This average pace of movement would project forward to a volume less than 3.1 mmt, which is below the current 3.6 mmt forecast.
At the same time, over the past two crop years, an average of 42.5% of total crop year exports were realized as of week 37, with 42% of exports reported in 2017-18 and 43% of exports reported in 2018-19. This pace would project forward to 2019-20 crop year exports of 4.2 mmt, 600,000 mt higher, a volume that would seem impossible given the current Statistics Canada stocks estimates.
Statistics Canada merchandise trade data shows steady movement over the May-July period or the last quarter of the crop year in 2017-18 (960,087 mt) and 2018-19 (970,678 mt). In 2017-18, 71.6% of the movement over this period consisted of movement to China, while in 2018-19, shipments were more diversified with 54% of the shipments to China.
Week 37 data includes commercial stocks reported at 386,200 mt as of April 19, a volume that is 12% higher than reported for the same week in 2018-19 and 31% higher than the five-year average. Stocks in terminal positions are below the five-year average, while stocks reported in primary elevators are well ahead of last crop year and the five-year average.
Prairie bids for dry peas continue to push higher. Yellow peas delivered to Saskatchewan plants are up $0.50/bu. this month according to Statpub.com to $7.80/bu. as of April 24, a level last seen in September 2017 according to Saskatchewan Agriculture/Statpub.com data. Green peas are reported at $12.25/bu., the highest reported within the past year. The market should encourage producer selling while attracting a few more acres during the spring planting season.
Cliff Jamieson can be reached at cliff.jamieson@dtn.com
Follow him on Twitter @Cliff Jamieson
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