Canada Markets

Well-known Saskatchewan agriculture journalist Kevin Hursh reported CWB data by social media this morning, suggesting that 37 vessels were waiting off of the Canadian West Coast, a number which is suggested to be growing. Meanwhile, West Coast commercial inventories of all grains, at 430,000 mt, are the lowest seen in available CGC data going back to 2003/04, while Hursh also reports an unprecedented number of unfulfilled railcar orders totaling 40,000.

While provincial governments along with the federal government remain quiet on this issue, it may be the reaction of the financial community that places this issue in the spotlight, with Farm Credit Canada yesterday announcing that they will be contacting 16,000 customers to discuss options related to the lack of both grain movement along with cash flow.

Week 23 data from the CGC indicates total exports of Canadian grains at 16.639 mmt as of Jan. 12, a volume which is 21.7% ahead of last year's 13.676 mmt as of the same week. Wheat movement, at 6.926 mmt, is 1.2 mmt ahead of year-ago volumes. Durum's exports are very similar to year-ago levels at 1.973 mmt. Canola's year-to-date export volume is 3.281 mmt, which is down 368,000 mt from year-ago levels. Barley and oat exports continue to lag, down 235,770 mt and 106,970 mt from last year, respectively.

The recently released Exports of Canadian Grain and Wheat Flour by the Canadian Grain Commission as of December 2013 shows Canada's top wheat customer being the United States, at 937,600 metric tonnes, up 40.3% from year-ago levels. The next two largest customers by volume are Indonesia and Mexico, which have both increased volumes over last year. Year-to-date exports to China have risen 26.9% to 347,700 mt, while also noteworthy is the movement of 309,300 mt to Brazil, having shipped just 108,700 mt to this country last crop year.

Durum sales to Italy are up slightly over last year's sales to 378,000 mt, while Morocco, the next largest customer, has received 19% less volume than last year at 312,700 mt. The third largest customer is the United States, where exports through licensed facilities have increased 45% to 202,600 mt. Disappointing sales to Algeria have lead to a 67.5% reduction in volume to 126,500 mt.

With total exports of oats forecast to be slightly higher than year-ago levels for the 2013/14 crop year, this year's exports are highly linked to the freight issues faced in moving Canadian grain. Year-to-date exports as of the end of December are reported at 395,000 mt, down 29% from year-ago levels. The Mar/May oat inverse reached a recent high of 48 cents (March future over the May future), with Canadian logistics largely behind this move.

Exports of canola as of Dec. 30 indicate China to be the largest customer, taking 1.487 mmt, up 15% from year-ago levels. Japan and Mexico are the next two largest customers by volume, both have which have scaled back purchases when compared to last year. The fourth largest is the U.S. with a volume of 227,000 mt, up 60.5% from year-ago levels.

Dry pea exports are slightly ahead of year-ago levels at 926,500 mt. China has boosted purchases by 71% to 400,600 mt, while India has taken just slightly more than last year at 420,200 mt.

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

(ES)

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