Canada Markets

Statistics Canada released its report yesterday on grain exports by final destination, as of November, including data covering the first one-third of the 2012/13 crop year.

While early in the crop year, it will be interesting to follow this data over time to see what, if any, impacts are taking place to our grain export system and trade patterns as a result of economic hardships across regions of the world. This includes the European debt crisis, and distorted patterns due to the 2012 crop shortfalls in many regions of the world. Also, with CWB deregulation, there are more players beating more bushes around the world.

Wheat exports, excluding durum, at the end of November totaled 4.514 million metric tonnes, just slightly lower than 2011 exports at 4.553 mmt for the same period. The largest growth came in sales into Africa at 417,189 mt, up 23% from 2011, Asia, up 47.7% over 2011 and the U.S., up 27.7% over 2011.

Growth in sales into Asian countries has been most robust during this four-month period. China's increase in Canadian wheat purchases was up 103.5% to 115,500 mt. Indonesia's purchases grew by 53.5% to 280,705 mt and Japan's purchases increased 47% to 474,949 mt.

The U.S. Wheat Associates reports U.S. commercial sales on weekly basis on its site uswheat.org. As of Nov. 29, U.S. wheat sales were 10% behind the prior year's sales. American data shows 2012 sales lower than 2011 in six of 10 regions of the world.

Total durum exports from Canada as of Nov. 30 were 1.671 mmt, 31% above 2011 data. The largest gains came from sales into North Africa, including Algeria, up 99% to 311,680 mt, and Morocco, up 451% to 385,748 mt. Sales to the U.S. moderated from last year, given the large supply of quality U.S. product available.

Oat exports as of Nov. 30 were 744,052 mt, down 3.8% from 2011. 98.5% of this product moved to the U.S. This number appears consistent with the pace required to meet Agriculture Canada's 2.325 mmt of annual exports. Supportive price action in U.S. feed markets should enhance exports to the U.S.

Canadian barley exports at the end of November totaled 547,584 mt, or 22% higher than 2011. Growth took place in the Middle East, increasing their purchases by 25.5% and Asia, increasing their purchases by 38.6%, and the U.S., with sales increasing by 27.6%. The higher-than-expected domestic feed demand in the U.S. may support some movement of feed barley into U.S. markets. Meanwhile, malt barley exporters are challenged with competition from Australia and Argentina and face difficulty sourcing product on the Prairies. Tight barley supplies on the Prairies may place in question the 2 mmt target for exports this crop year.

Canadian canola exports from August to November 2012 totaled 2.833 mmt, which is 3.4% lower than 2011. The largest customer grouping is in the Asian region, which is 2.5% ahead of the same period in 2011. China's purchases have gained 38% to reach 976,747 mt, while Japan's purchases increased 9% to 862,883 mt. Sharp losses were also incurred in trade with smaller, price-sensitive countries. Pakistan purchased 222,178 mt in the August-through-November period in 2011, while purchasing none this crop year, as widely expected. Bangladesh bought 97,152 mt in 2011, while Canada shipped only 8,403 mt this crop year, for the same reason. Sharp reductions in sales also occurred with the EU and the U.S. so far this crop year, while business to the Middle East, specifically the United Arab Emirates, increased 34% to 185,646 mt.

Cliff Jamieson can be reached at cliff.jamieosn@telventdtn.com

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