Canada Markets

Statistics Canada's International Merchandise Trade report both surprised and disappointed Wednesday. A trade deficit for the month of April of $638 million was reported, down from a surplus of $766 million in March. A Bloomberg poll had suggested an expectation of a $200 million dollar surplus. It is this sluggish activity that the Bank of Canada warned about Wednesday when they left the overnight bank rate unchanged at 1%, a move which softened the Canadian dollar which is exactly what the Bank of Canada wants in order to stimulate export activity.

Farm, fishing and intermediate food product exports were reported at $2.557 billion in April, up 4.4% from the previous month and 7.5% above year-ago levels.

When it comes to grain movement off the prairies this winter, special crop shippers have suggested that not only did rail service suffer over the winter months, but the increase in overall movement as a result of the Order in Council in March which set minimum shipping targets for each of the two railways failed to address the slow movement for special crops. While railways focused on east-west traffic in order to meet their targets, movement into the U.S. and also Mexico suffered. The federal government will be writing the rules for the recently approved Bill C-30, which is expected to address shipping targets by corridor.

Wednesday's report indicated that lentil exports for April totaled 124,163 metric tonnes, the highest volume since January. As seen on the attached chart, cumulative exports this year at 1.217 million metric tonnes, are 7.7% above year-ago levels and 26% ahead of the three-year average for the same time period. The most recent export target for this crop year from Agriculture and Agri-Food Canada is 1.6 mmt, which should be achievable given movement in recent months.

Mustard exports in April totaled 11,824 mt, the highest volume shipped since December and the fourth highest monthly volume so far this crop year. Cumulative exports this year total 101,000 mt, which is 12.5% ahead of the pace seen in the 2012/13 crop year while 16.8% above the three-year average pace. AAFC's most recent target is 130,000 mt which should be achievable given the recent pace of movement.

Canary seed exports for the month of April totaled 13,522 mt, the highest monthly movement since November and the second highest movement seen this crop year. Cumulative exports are 113,689 mt, 15.9% ahead of the pace seen in 2012/13 and 4.9% ahead of the three-year average pace. AAFC's export target reported in May is 143,000 mt, a target which should be achieved given recent monthly activity.

Sunflower exports totaled 5,032 mt in April, pretty much tied with March for the highest shipping months of the year. Cumulative exports totaled 37,555 mt, 19.5% higher than the cumulative exports this time last year, while 21.8% above the three-year average. This compares to AAFC's 2013/14 export target of 50,000 mt which should be achievable given recent activity, although carryout stocks are expected to be incredibly tight at 5,000 mt and available supplies may be the limiting factor.

DTN 360 Poll

This week's poll asks if weather-related delays are forcing you to adjust seeding plans. You can weigh in with your thoughts in the lower-right corner of DTN's Home Page. Thanks for your support!

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

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