Canada Markets

With the crop year 61.5% complete as of the end of week 32 (March 16), Canadian Grain Commission's Grain Statistics Weekly points out what commodities are most affected in the current environment where shipping is limited, a situation influencing both export and domestic movement of grains.

Of the grains studies, durum movement is reflecting the best chance of meeting the existing Agriculture and Agri-Food forecast for disappearance for the crop year. Current disappearance, which includes exports of 2.699 million metric tonnes, and domestic use of 466,000 metric tonnes, is reported at 58.9% of the annual forecast, with 38.5% of the crop year to go. Current terminal stocks total 176,300 mt in Canadian ports, of which 57,500 mt is in store Thunder Bay where thick ice will delay the port opening. As of the same week last year, there was 446,400 mt in store these same facilities.

While lagging the AAFC's disappearance targets, canola is the next closest to meeting the annual forecast in the commodities studied, with total disappearance at 55.8% of the AAFC's forecast for the year. Current forecasts for the year total 8.1 mmt for export movement and 7.2 mmt of domestic crush. Current inventories in export positions as of Week 32 totaled 144,600 mt, down from the 241,300 mt that were in store these facilities as of the same date one year ago. Exports as of Week 32 are calculated to be 309,000 mt behind the steady pace needed to meet the annual forecast of 8.1 mmt, while most recent data from Canadian Oilseed Processors Association indicates that year-to-date crush as of March 19 is 261,600 mt behind the cumulative pace needed to hit the annual 7.2 mmt crush target.

Wheat disappearance as of week 32 totals 11.560 mmt, which reflects 45.4% of the annual forecast of 25.457 mmt as indicated by AAFC. Note that exports of flour are ignored for the purpose of this study, which would slightly narrow the gap between the estimated disappearance and the annual forecast. Cumulative exports of 9.408 mmt are 1.054 mmt behind the cumulative pace to meet the 17 mmt export forecast. Commercial wheat stocks held in all ports in Canada total 818,600 mt, which is below same-week inventories of 1.033 mmt last year.

Flax disappearance as of week 32 is reported to be 39.6% of the annual target set by AAFC. The current forecast suggests 575,000 mt will be exported this crop year, while a further 58,000 mt would be used domestically. Licensed exports totaled 228,200 mt as of March 16, while domestic use totaled 22,500 mt. Export data as of February indicated movement to Europe and China are higher than year-ago levels, while shipments to the U.S. are 7,200 mt below year-ago levels and may be affected by U.S. rail movement.

Cumulative dry pea exports as of week 32 are reported to be 33% of the annual forecast for disappearance, with expectations calling for 2.850 mmt of exports along with an additional 743,000 mt of domestic use. Year-to-date exports of 1.121 mmt are well below the 2.850 mmt export forecast for the 2013/14 crop year.

Year-to-date disappearance of oats is reflecting the troubling situation reflected in both the media and the CME oat futures trade. Disappearance year-to-date is only approximately 28% of the annual forecast for total disappearance, which includes 1.975 mmt of oat exports along with an additional 1.014 mmt of domestic consumption. Oat exports as of week 32 total just 611,500 mt, below the 720,700 shipped as of the same date last year. Reuters Paris reports that the European Union's oat exports will reach a nine-year high this year due to Canada's inability to ship product to U.S. mills. To date, 209,000 mt of export licenses have been granted from Europe.

Lowest on the list is barley, which is reported at just 18.3% of the annual forecast for disappearance. One could perhaps place little faith in the domestic numbers which could easily be understated as little of this volume flows through licensed facilities, although barley exports at 707,000 mt are well below the 1.950 mmt annual export forecast. CGC export data for barley as of the end of February indicates a sharp year-to-date reduction in exports to Japan, with 168,900 mt shipped this year as compared to the 430,100 shipped as of February 2013. Movement to the U.S. is also 68,400 mt below year-ago levels, perhaps influenced by higher available feed supplies in the U.S. combined with challenging logistics.

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

(ES)

© Copyright 2014 DTN/The Progressive Farmer. All rights reserved.