Canada Markets

The Canadian Grain Commission reported 34,300 metric tons of durum exported in week 30, or the week ending Feb. 27, while close to the 40,270 mt needed this week to remain on track to reach the current Agriculture and Agri-Food Canada estimate of 2.350 million metric tons for 2021-22. This is indicated by the blue bars and the red line on the attached graphic, both measured against the primary vertical axis.

As can be expected on a year of tight supplies, exports may be front-loaded or weighted heavier in the early months of the crop year, with cumulative exports of 1.4582 mmt, which is 102,431 mt ahead of the steady pace needed to reach the government's export demand forecast, as evidenced by the green line above the black line on the attached chart, measured against the secondary vertical axis.

Reasons to question current Agriculture and Agri-Food Canada/Statistics Canada forecasts exist. Commercial stocks in week 30 are reported at 867,900 mt, the highest volume reported for this week in three years and 89,300 mt or 11.5% higher than the five-year average. Of this volume, 44.8% is situated in primary elevators, while 55% is situated in terminal elevators. Current licensed exports plus stocks in commercial storage total 2.326 mmt, or just 24,000 mt below the current export forecast for the crop year as of the first 30 weeks or 58% of the crop year.

As indicated, exports may be front loaded this crop year as buyers scramble to secure supplies, although this is not normally the case for durum. During the past five years, licensed exports as of week 30 accounted for an average of 52.2% of the crop year total exports, meaning roughly 47.8% of exports take place from week 30 to week 52 on average. Additional demand will be seen prior to the end of the crop year, with this notion further supported by drought conditions in North Africa, despite showers forecast for the next week.

The Canadian Grain Commission is reporting that producers have delivered 1.7539 mmt of durum into licensed elevators as of week 30, down 53.2% from the same period in 2020-21 and 40.8% below the three-year average for this period. When these deliveries are calculated as a percentage of available supplies, defined in this study as Statistics Canada's July 31 farm stocks estimate added to the agency's estimated production, we find that 64.2% of estimated supplies for 2021-22 have been delivered as of week 30. On average during the past three years, only 46% of available supplies had been delivered as of week 30.

To summarize:

-- As of week 30, licensed exports plus stocks in commercial storage combined are high enough to meet AAFC's current export forecast.

-- On average during the past five years, close to 50% of crop year exports are achieved in the week 31-through-week 52 period.

-- On average over the past three years, 54% of available farm supplies are delivered into licensed facilities in the week 31-to-week 52 period.

-- As of week 30, the pace of exports is ahead of the steady pace required to reach the current government forecast.

These points support the idea that supplies are higher than forecast, allowing for higher than forecast exports, while ending stocks will remain tight.

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

Follow him on Twitter @Cliff Jamieson

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