As of week 26, or the week ending Feb. 2, producers have delivered a total volume of 31.571 million metric tons of the major grains into the licensed grain handling system. This is 2.3% higher than the same period in 2018-19 and 8.9% higher than the five-year average.
Producers have delivered more durum (28.8%), oats (16.4%), barley (11.3%), canola (6.6%) and peas (19.8%) than over the first half of 2018-19, with the year-over-year percent change in brackets. This is despite the delayed harvest, vast acres of unharvested crop and challenges on the export front, while facilitated by record performance by the two railways over the fourth quarter of 2019.
Deliveries of wheat (minus 5.9%) and flax (11.2%) are down year-over-year, with the percentage decline in brackets. Canada's all-wheat producer deliveries are down 129,100 metric tons over the first half of the crop year, with a surge in durum deliveries close to offsetting a drop in wheat movement. This movement of durum and tightening stocks is a factor in current forecasts for 2019-20 from AAFC that show the potential for a 15% increase in seeded acres in 2020.
Producers have delivered 10.306 mmt of canola over the first half of the crop year, the second-highest volume delivered in the first half of the crop year seen in the past five years, with a year-over-year surge in domestic demand offsetting a decline in exports shown for week 26. This volume is up 6.6% from 2018-19 and 8.2% higher than the five-year average.
As of week 26, terminal receipts for all grains across all licensed export terminals in the country are reported at 24.496 mmt, down 8.7% from the same period in 2018-19 and 4.2% below the five-year average.
Of this volume, 13.345 mmt was receipted at the West Coast terminals in the Port of Vancouver and Prince Rupert, down 7.7% from 2018-19 and 2% below the five-year average, the lowest volume reported in five years.
Export data for the first half of the crop year shows export movement of Canada's two largest crops trailing volumes shipped in 2018-19 and the five-year average. Licensed exports of wheat total 7.8717 mmt, down 14.9% from 2018-19 and 2.4% below the five-year average. Crop year exports of wheat (excluding durum) tends to favour the second half of the crop year. Over the past five years, week 26 licensed exports represented an average of 45.3% of total crop year exports, a pace that would project forward to crop year exports of 17.4 mmt. This is seen with the blue bar on the attached graphic, a volume below the 19.8 mmt exported in 2018-19 (grey bar) and the current AAFC forecast of 18.6 mmt (brown bar).
Durum exports have diverged from the pace of wheat exports. As of week 26, the CGC reports 2.441 mmt exported, up 43.3% from last year and 14.8% higher than the five-year average. This is the fastest pace of movement seen since 2.7 mmt was exported over the same 26-week period in 2014-15. Over the past five years, an average of 45.8% of crop-year exports were realized as of week 26, a pace that projects forward to crop year exports of 5.328 mmt, well above the current AAFC forecast of 4.8 mmt and the 4.526 mmt shipped in 2018-19.
It is interesting to note that in 2018-19, only 37.6% of total crop year exports were achieved in the first one-half of the crop year, a pace that would point to even greater export potential than the previously mentioned projection.
As seen on the attached chart, the projection for canola exports are only slightly higher than current AAFC forecast and the volume realized in 2018-19. Over the past five-years, an average of 49.2% of total crop year exports was achieved as of the release of the week 26 licensed export data, a pace that projects forward to crop year exports of 9.319 mmt, only slightly higher than the 9.140 mmt shipped in 2018-19 and the current AAFC forecast of 9.1 mmt.
A possible concern for canola -- in 2018-19, week 26 cumulative exports represented 55% of crop year exports. This pace of movement would project forward to crop year exports of 8.330 mmt. Weak December canola exports reported along with weak exports shown for week 26 are a concern.
Based on the five-year average movement of dry peas through licensed bulk channels, crop year export projections are slightly lower than the volume forecast by AAFC and the volume achieved in 2018-19. Over the past five years, an average of 45.1% of crop year exports were realized as of week 26 data, a volume that projects forward to 3.1 mmt of crop year exports. At the same time, an average of 32.9% of crop year exports were reported as of week 26 over the past two crop years, a pace of movement that would project forward to exports significantly higher at 4.3 mmt, which compares to AAFC's current 3.4 mmt forecast. The current volume of stocks will not allow for such a movement, although this pace would leave ending stocks extremely tight given current supply estimates.
Cliff Jamieson can be reached at email@example.com
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