Canada Markets

Week 31 data, covering the week ending March 5 and the first 60% of the crop year, shows cumulative producer deliveries of principal crops into licensed facilities totaling 35.440 million metric tons, higher than the 34.3 mmt delivered in the same period of 2015/16 and the five-year average of 30 mmt. Looking at the largest crops of wheat and canola, cumulative producer deliveries of wheat in this period are 780,000 metric tons below average (excluding durum), while canola deliveries are at a record pace and close to 2.7 mmt above the five-year average.

Shipments of all grain from primary elevators on the Prairies as of week 31 are reported at 27.4 mmt, slightly above the 27 mmt moved in the same period last year while also higher than the five-year average. While shipments of oats, barley, soybeans and bulk lentils are clearly ahead of last year's pace, the largest year-over-year gains are seen in the movement of canola and dry peas, which are off-setting the lack of wheat shipping.

As seen on the attached chart, exports from licensed facilities are well-ahead of the average pace and only 433,900 mt or 1.7% below year-ago volumes. Once again, a 737,800-mt year-over-year increase in canola shipping is helping offset a near 2 mmt year-over-year drop in wheat exports (excluding durum).

Varying opinions are being presented in the media over the state of the country's wheat exports. One recent opinion points to the likelihood that Canada's wheat exports will increase as the movement of canola slows over the balance of the crop year, given tighter supplies. At the same time, the movement of canola has yet to slow, while wheat prices have been trending lower which may add to the challenge in coaxing deliveries, regardless of quality. Analyst Marlene Boersch told CTV News that despite a growing global wheat market, the Canadian industry is "not really planning for it."

Despite the aggressive deliveries, primary elevator stocks continue to leave the industry in a comfortable position. Stocks of all grains are reported at 3.822 mmt, slightly lower than the same period last year although well-above the five-year average. This represents 53.9% of the total reported capacity while could eventually lead to nervousness across the grain trade ahead of the busy spring season.

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

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