The Canadian Grain Commission reports that 230,000 metric tons of wheat was exported through licensed export channels in week 6, or the week ending Sept. 10, the second lowest weekly volume shipped so far this crop year. Year-to-date volumes exported are reported at 1.8755 million metric tons, 27.8% higher than the same period in 2016/17 and less than 40,000 mt behind the five-year average for this period.
An early harvest across much of the Prairies has facilitated movement, with producers reported to deliver 2.139 mmt into licensed facilities as of week 6, which is 473,600 metric tons or 28% higher than the same period in 2016/17, although a modest 65,700 mt lower than the five-year average for this week.
There is perhaps mixed signals looking forward. AAFC suggests that higher U.S. demand will lead to a slightly higher export volume shipped in 2017/18, although supply is indicated to be the limiting factor. At 1.5118 mmt, terminal stocks in Canada are higher than any year seen in the past five years and 21.4% higher than the five-year average. Overall commercial stocks are pegged at 3.1227 mmt, or 24% higher than the five-year average. At the same time, in-transit volumes in week 6 (western rail and Great Lakes) are reported at 245,700 mt, which is lower than any year reported in the past five years and 36% lower than the five-year average for this week.
Canada's competitiveness will be partially tied to movements in the Canadian dollar. The spot Canadian dollar reached its highest level since May 2015 in last week's trade, or the week of Sept. 5, with a high of $.82634 CAD/USD. This week's trade saw the first weekly drop in five weeks, while consolidating within last week's trading range. Headlines from the National Post say forecasters "look for a 75-cent loonie" when the Canadian dollar comes off its "sugar high." Latest CFTC data as of Sept. 12 shows investors paring their net-long futures position by 3,145 contracts to 50,499 contracts, the first drop in three weeks and the smallest net-long held in five weeks. Traders will be focused on whether Canada can maintain its favorable economic data while the direction of crude oil will also play a vital role as the season of summer demand comes to an end.
Cliff Jamieson can be reached at email@example.com
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