Canada Markets

The August release of the Canadian Grain Commission's Exports of Canadian Grain and Wheat Flour indicates a slow start to exports for most grains, largely due to the late start to the Prairies harvest and tight carry-in stocks. Total grain exports for August as seen in this report fell 20% from August 2012 exports to 1.825 million metric tonnes. As seen on the attached chart, all major grains lag year-ago exports, as well as the monthly pace required to meet the current Agriculture and Agri-Food Canada's export targets, last reported Sept. 18, assuming that monthly movement will remain steady over the marketing year.

The green bars on the attached chart represent the export target for the month, which is Agriculture and Agri-Food Canada's latest annual export target divided by 12, assuming a constant pace of shipments. The closest commodity to the 2013 monthly target is durum, where actual shipments fell just 20,400 metric tonnes short of the month's target. Canola was the crop that lagged the targeted shipments by the largest margin at 462,500 mt. The all-wheat and flour exports lagged the monthly target by 177,600 mt. Note that this CGC report does not include shipments to the U.S. from unlicensed facilities that will be released at a later date.

The largest wheat buyers were Japan at 158,000 mt, up 44% from the same month in 2012; Mexico, whose 131,100 mt was 346% above year-ago levels and Bangladesh, where 108,900 mt of Canadian wheat exports were 529% above August 2012 exports to that country. Two major buyers that have lagged last year's exports are the United States, where 93,100 mt were exported which is 42% below year ago levels, while Indonesia, at 33,600 mt, saw its August movement fall by 68.5%. Exports to China increased 27% over year-ago levels to 73,500 mt.

The largest durum buyer for August was Italy, with 109,800 mt being 793% above year-ago levels. Two of the largest buyers from 2012/13, Morocco and Algeria, imported far less volume in August as compared to last year, with no movement to Algeria seen in August, while Morocco reduced its volume by 50% to 38,000 mt. Movement to the United States increased 112% over August 2012, to 30,700 mt.

Most of Canada's regular canola customers took less in August due to the lack of exportable supplies, while the pending harvest was also expected to drive prices lower and may have enticed buyers to wait. Exports to China, Canada's largest customer in 2012/13, were 60,600 mt, down 47% from August 2012. Japan, the second largest customer in 2012/13, was shipped 154,000 mt, which was down 15.4% from year-ago levels, while no seed was shipped to Mexico in August, down from 79,200 mt from August 2012.

Whole pea exports in August as reported by the CGC were 64.5% below August 2012. Canada's two largest dry pea importers, China and India, drastically reduced their August shipments, largely due to tight stocks in export channels during the month. Currency devaluation in India may pose further challenges for Canadian exporters in upcoming months, along with prospects for increased pulse production within India, which is suggested to affect the country's import needs.

Both oats and barley exports in August saw movement to the United States reduced substantially from year-ago levels. China and Japan, two of Canada's largest barley customers, did not have shipments reported this month, while an expected 10% increase in global production could increase competition into these markets. The U.S. market, which received approximately 97% of Canada's oat exports in 2012/13, is expected to maintain its annual volume of Canadian production in order to satisfy milling demand.

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

(ES)

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