Canada Markets

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Prairie grain movement has gotten off to a difficult start this crop year, first due to the later harvest, then followed by the railway's inability to meet the demand for cars to ship product to export positions. While the railways have been suggested to be spotting the traditional 5,000 to 5,500 cars per week, the demand for cars is double this amount.

This can be seen on CP Rail's website, which indicates that 5,049 cars are planned to be spotted the week of Nov. 4, while the open requests for this same week are 10,841 cars. Reports also suggest that CN Rail is reporting outstanding orders of 8,091 cars as of Nov. 1, which is close to two weeks' activity.

Meanwhile, Bloomberg reports that 20 ships are waiting in Vancouver, while five more are waiting in Prince Rupert. In some cases, the grain simply is not in place for loading.

Due to the current bottle-necked system, elevator space remains at a premium on the Prairies. Companies may be unable to purchase grain due to limited capacity, or may be simply not stressed to purchase grain, knowing that producers may be inclined to continue to push supplies into the system for cash flow needs or to deal with the shortage of on-farm storage due to the massive crop. Basis levels are wider than levels experienced across the United States border, a good example of which is Friday's average prairie CWRS wheat basis at $1/bushel under the December Minneapolis future, while the National average spring wheat basis in the U.S. was 37 cents under the December future.

So far this crop year (since Aug. 1), producers have delivered higher volumes of wheat as compared to historical data and as well as relative to other crops. As of Week 12 data which takes us to Oct. 27, producers have delivered 4.968 million metric tonnes into the system, which is a 20% increase over 2012 producer deliveries, while 41% over the average of the past five years. Year-to-date exports of wheat have kept pace, reported at 4.936 mmt as of the same date.

Durum movement into the system has also remained positive, with year-to-date deliveries up nearly 6% from the same period last year to 1.033 mmt, while 22.6% ahead of the five-year average. Again, Canadian Grain Commission data indicates that exports has kept pace with the pace of deliveries, with 1.135 mmt exported as of week 12.

On a percentage basis, dry pea deliveries into the system have done exceptionally well when compared to last year and the average over the past five years. To date, dry pea deliveries have increased 37.6% from year-ago levels to 935,900 mt, which remains 40% over the five-year average. Exports have not kept pace, with year-to-date exports reported at 570,900 metric tonnes.

So far this crop year, producers' deliveries of canola are 2.8% behind last year's pace, although 17.6% ahead of the average volume delivered over the past five years. Producer deliveries of 3.742 mmt as of Week 12 lead the crop's year-to-date exports, which total 1.835 mmt.

The weakest data was seen in the barley and oat deliveries as of Week 12, with barley deliveries to date being 1.8% ahead of last year and oats lagging last year's volumes by 10.3%.

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

(ES)

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