In this week's reports, Australia's official winter crop estimates were revised higher in the February release of Australian Crop Report February 2018. In total, winter crop production for all crops is estimated down 36% from 2016/17 to 37.8 million metric tons, although has been revised up from the 34.9 mmt estimate released in December. Production of major crops such as wheat is estimated at 21.2 mmt (20.3 mmt), canola at 3.7 mmt (2.9 mmt) and barley at 8.9 mmt (8 mmt), with December estimates in brackets. By crop, production is down 38% year over year for wheat, 33% for barley and 15% for canola.
USDA's February Grain: World Markets and Trade report included Australia's previous 8-mmt production estimate for barley, while estimating global ending stocks at 17.8 mmt. This is the smallest global ending stocks seen in their tables going back to 1995/96, and by several accounts, the smallest global carryout realized in 30 years. Australia's upward revision will have little effect on this tight stocks situation.
As Canada celebrates Canada Agriculture Day on Feb. 13, another success story this crop year is barley exports, as tighter world supplies of barley in addition to trade tensions between the United States and China affecting exports of DDG and sorghum continue to support rapid movement of Canadian barley. Through the month of December, Canada's barley exports totaled 801,833 metric tons, up sharply from the previous year and 64% higher than the three-year average. Of this volume shipped, 661,186 mt was shipped to China, or 82% of the total volume. In addition, a further 246,803 mt of malt was exported during this five-month period.
Fast forward to the Canadian Grain Commission's week 27 statistics, which shows 925,300 mt of exports through licensed facilities through the first 27 weeks of the crop year, or as of Feb. 4. This volume is 85% higher than the same period in 2016/17 and 41% higher than the five-year average.
Over the past five years, grain exports as of week 27 have accounted for an average of 29% of total crop-year exports, which projects to total crop-year exports of over 3 mmt, a volume not seen since the 2007/08 crop year and well above the 2.450 mmt forecast by Agriculture and Agri-Food Canada. The immediate challenge could be the higher-than-expected Australian supplies hitting the market.
As seen on the attached graphic, both commercial stocks and in-transit (western rail) remain at levels higher than seen in recent years, potentially supporting the current pace of movement. As of week 27, commercial stocks were reported at 424,400 mt, up 65% from the five-year average. In-transit stocks on western rail is reported at 48,300 mt for the week, which is 91% higher than the five-year average.
DTN 360 Poll
This week's DTN 360 Poll asks if you agree with the significant increase in farm stocks of canola as reported in Monday's Statistics Canada report. You can weigh in on this poll, which is found at the lower right of your DTN Canada Home Page.
Cliff Jamieson can be reached at firstname.lastname@example.org
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