Canada Markets

There is no surprise that Vancouver stocks are tight as we move into the new crop year. In July, Agriculture and Agri-Food Canada estimated total stocks of all principal field crops at 9.870 million metric tons, down 30.5% from the volume carried out of 2019-20. This is based on July 31 for all crops but soybeans and corn, where stocks are reported as of Aug. 31.

The Canadian Grain Commission's week 1 Grain Statistics Weekly, reporting data as of Aug. 8, shows commercial stocks in Vancouver at 414,700 metric tons, up slightly from the 399,500 mt reported for the previous week and slightly higher than the four-week average of 407,100 mt. This represents the first week of the 2021-22 crop year; it's down 15% from week 1 of 2020-21 and is 16% below the three-year average. This represents 46% of the estimated working capacity for terminals at the Port of Vancouver, which is calculated at 903,400 mt by the Grain Marketing Program. While not shown, Prince Rupert stocks are shown at 13,400 mt, down 86% from last year and 68% below the three-year average, while representing just 9% of the estimated 146,700 mt working capacity at the port. Stocks on the West Coast are tight.

The CGC's week 1 report shows a week-over-week increase in terminal receipts at 708,500 mt (all terminals combined), while exports of major crops ticked higher to 686,300 mt, the highest volume shipped in five weeks largely due to a significant 416,000 mt of wheat shipped.

At the same time, producer deliveries fell by 79,300 mt from week 52 to 498,100 mt in week 1. The latest Saskatchewan Crop Report shows the harvest is 20% complete overall, while delays will be faced since and over the week ahead due to precipitation. There remains a great deal of uncertainty over the yield of the crop, the area that will be harvested and in addition, just how fast harvested grain will be marketed. Tough decisions will be made given the trade-offs between cash flow pressures and the potential for markets to move even higher over time.

Another factor to watch is railway performance. In week 52, Canada's two major railways spotted only 86% of the cars wanted for loading during the week wanted, with CN Rail spotting only 63% of the cars wanted which includes only 49% of the cars wanted for the Vancouver shipping corridor. This is despite the AG Transport Coalition week 52 report that shows year-over-year demand for cars is down 40% from the same week in 2020-21.

The AG Transport Coalitions week 1 report shows both railways spotting a combined 90% of cars wanted for loading in the week wanted, with CN's performance improving to supply 81% of the cars wanted overall. At the same time, CN supplied 81% of the cars wanted for loading for the Vancouver corridor; 76% of the 332-car unfilled demand was for the Vancouver corridor, which is by far the largest of all shipping corridors and accounted for 61% of all cars ordered in the 2020-21 crop year.

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

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