Canada Markets

Statistics Canada's September merchandise trade report released today surprised economists, with an expectation of a $300 million deficit, slightly lower than Augusts' $463 million deficit, while instead a surplus of $710 million was reported. This was a result of a 1.1% increase in exports while imports fell by an amount of 1.5%.

The report indicates exports of farm, fishing and intermediate food products items to fall by 10.5% to $2.515 billion, which is 13.9% above September 2013. StatsCan reports the dollar value of wheat exports falling 25.1% in September from the previous month while the loss in canola exports was reported at 21.6%.

Export data for pulses looks very strong. Canada exported 721,293 mt of peas in September, for a cumulative volume of 961,316 mt since the start of the crop year. This volume is 65.8% higher than the cumulative exports reported as of September 2013 and 72.5% higher than the three-year average exports in the first two months of the crop year. Considering that the current AAFC target for Canadian pea exports in 2014/15 is 2.8 mmt, 34% has now been exported in the first 17% of the crop year.

Of the shipments made year to date, 40.5% has moved to India, 31.5% Bangladesh and 17.7% to China. Shipments to India will be something to watch, with year-to-date exports 39% above the three-year average for the same period.

Lentil exports for the first two months of the crop year total 299,129 mt, which is 113% of last year's exports for the same period and 118% of the three-year average. With AAFC's target for exports set at 1.6 mmt, 18.7% of the target has been achieved in the first 17% of the crop year.

Of the total volume traded, 28% was shipped to India while 15% was shipped to Turkey. India's purchased volume of 83,597 mt is 8.2% above the three-year average.

An interesting piece was released by The Western Producer focusing on lentil grades on the Prairies. The Canadian Grain Commission has reported that 190 of 288 samples received is grading No. 1 or No. 2, or 66%, in data released as of Oct. 27. Processors are suggesting that in reality this number could be closer to 30%, which results in the wrong signals sent to buyers. It is suggested that government sampling is not representative of the Prairies crop.

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

(ES)

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