Agriculture and Agri-Food Canada's Oct. 19 supply and demand tables shows a modest increase in the country's average dry pea yield, which added 100,000 metric tons to the country's production estimate. Exports were revised 100,000 mt lower, to 2.8 million metric tons, which would be the smallest volume shipped in three years and below the five-year average of 3.1 mmt.
As a result, forecast ending stocks for 2018-19 were adjusted from a 150,000-mt decline reported in September to a 50,000-mt year-over-year increase reported in October's report, as shown on the yellow bar on the attached graphic.
There are perhaps reasons to believe that stocks could grow to even larger levels. Over the past three years, production estimates reported in Statistics Canada's final estimates were increased each year from the estimates reported in AAFC's October report (including revisions, if any), with final production estimates averaging 3.9% higher than reported in October. Crop year exports exceeded the volume forecast in the October report in two of the three years, averaging 6.9% higher, while final ending stocks reported by Statistics Canada average 15.7% higher than the estimates released by AAFC in October.
Another concern is the current pace of exports. As of week 11, or the week ending Oct. 14, a cumulative 473,700 mt of peas exported through bulk licensed facilities, down 42.3% from the same period in the previous crop year. Over the past five years, an average of 30.3% of total crop year exports were realized in the week 11 licensed exports reported by the Canadian Grain Commission. This suggests a typical front-loaded export pace that would project to roughly 1.6 mmt of exports in 2018-19, well-below the current 2.8 mmt target set by AAFC.
Despite a slow start to the crop year's export program, prices have bounced from harvest lows and have shown modest strength in recent weeks. Yellow peas have rebounded to $6.48/bu. from an August low of $6/bu. delivered to Saskatchewan plants, although remaining 13% below the three-year average for this week. Green peas have recovered from an August low of $7.50/mt to Wednesday's $8.18/bu., up 3% from the three-year average for this week.
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Cliff Jamieson can be reached at email@example.com
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