Canada Markets

The Canadian Grain Commission's monthly exports of grain and wheat flour report indicates total exports of the major grains, as of the end of October (which represents the first quarter of the crop year) are only slightly higher than year-ago levels. They're at 8.9902 million metric tonnes, as compared to last year's 8.9451 mmt, a difference of 45,100 metric tonnes or a .5% increase. This is bad news, given that total Canadian production is suggested to be 14% higher in 2013, while the possibility exists that Statistics Canada will reflect even higher production levels in its Dec. 4 report.

Wheat exports (excluding durum) are reported at 3.9275 mmt, 18% above year-ago levels and just below the 4 mmt target which is 25% of the 16 mmt export forecast assessed by Agriculture and Agri-Food Canada in its October supply and demand tables.

The largest wheat customer so far this crop year is reported as the United States, at 480,300 mt, which is 27.6% above year-ago levels and consistent with the message sent by the USDA suggesting higher Canadian imports in 2013/14. The second largest volume was shipped to Mexico at 437.7 mmt, up 84% from year-ago levels. Also of interest is 264,400 mt shipped to China this crop year, up 129% from year-ago levels. 206,200 mt have also been shipped to Brazil this crop year to date, while none had been shipped in the first quarter of the 2012/13 crop year, a sign that Canada is getting a piece of the recent export program to this country.

Durum exports are reported at 1.0258 mmt, which is 17% below the 2012 volume exported in the first three months of the crop year. This level is only slightly below the 1.125 mmt target which represents 25% of the most recent 4.5 mmt annual export target set by AAFC. The largest customer is Italy at 253,200 mt, which is 17% above year-ago levels. The second largest customer is Morocco at 170,200 mt, a volume which is 38% below year-ago levels. The United States is third largest at 128,300 mt, a volume which is 100% greater than year-ago levels. Another important customer, Algeria, has imported 63,300 mt in the first three months this crop year, which is 70% below year-ago levels.

Oat export volumes have struggled in the first three months of the crop year, at 230,600 mt. This represents a 40% reduction from year-ago volumes, while is well below the 550,000 mt target which is 25% of the most recent AAFC export target of 2.2 mmt.

Barley exports totaled 140,900 mt in the August through October period, a level which is 58% below 2012 levels and well below the 575,000 mt target which is 25% of the 2.3 mmt target forecast by AAFC.

Soybean exports totaled 976,200 mt, a volume which is 19% above year-ago levels. This volume is above the 775,000 mt target which reflects 25% of the 3.1 mmt annual export forecast released by AAFC in October.

Dry pea exports at 686,600 mt are 8.2% above 2012 levels and very close to being on track with the quarterly target of 687,500 mt, which is 25% of the 2.750 mmt export target released by AAFC.

Canola exports in the August to October period totaled 1.7441 mmt, a volume which is 16.4% below year ago levels and is also below the target of 2 mmt level which is 25% of the 8 mmt export target as forecast by AAFC. China represents the largest buyer, at 778,000 mt, which is up 4% from 2012. Canada's next two largest customers, Japan and Mexico, scaled back their purchases, with Japan receiving 540,600 mt, down 15.5%, while Mexico bought 314,900 mt which is down 33.8% from 2012. Growth is seen in exports to the U.S., which increased close to 62% to 110,700 mt to become the fourth largest customer so far this crop year.

The attached chart shows 2013 canola exports exceeding year-ago levels in the month of October for the first time this crop year. The black line trending above the red line indicates crop year-to-date exports in 2012/13 ahead of 2013/14 levels. This spells potential problems for canola prices, with total 2012/13 exports estimated at 7.261 mmt, while an estimated 2 mmt increase in supplies this crop year has resulted in an 8 mmt target which may be a lofty goal and result in burdensome ending stocks.

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

(ES)

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