Earlier in the year, Ron Davidson, the executive director of Soy Canada, expressed concerns over China's tariff on U.S. soybeans and the "uncertainty and disruption" this would cause to global markets. He cautiously balanced the potential for increased exports to China with the potential for increased competition expected from the U.S. within other markets as well as the potential for an increased flow of U.S. soybeans into Canada.
The attached chart highlights Canada's cumulative exports of soybeans by country, as reported in the Canadian Grain Commission's Exports of Canadian Grain and Wheat Flour report for the month of November. China is clearly a magnet for Canada's licensed exports. Total exports to all destinations as of November are reported at 2.4444 million metric tons, up 510,600 metric tons or 26.4% from the same period in 2017-18. Of this total, 97.3% or 2.379 mmt is reported to be destined for China, up roughly 1.4 mmt or 147% from the same period in the previous crop year.
Increased competition from the United States in markets other than China may be an issue, but is not detrimental to export volumes overall. Of 14 countries listed by the CGC in this report, export volumes have fallen year-over-year to 11 countries, totaling 788,700 metric tons. Of these 11 countries, year-to-date export volumes have fallen year-over-year to zero tons shipped in the current crop year to eight destinations, largely seen in European countries such as the Netherlands and Spain, where year-over-year exports have fallen 252,000 mt and 157,600 mt, respectively.
When the USDA's accumulated exports are considered as of the most recent Dec. 13 data, the U.S. is reporting a year-over-year increase in volumes shipped to eight countries where Canada is showing a corresponding year-over-year drop. U.S. exports to countries such as the Netherlands, Spain, Portugal and Italy may have led to sharply lower potential for Canada in these markets.
On Thursday, Agriculture and Agri-Food Canada's monthly supply and demand tables revised Canada's production lower in response to Statistics Canada's final production estimate released this month of 7.267 mmt, down from the estimated 7.717 mmt produced in 2017. As a result, forecast exports were reduced 200,000 mt to 5.5 mmt for 2018-19. Cumulative exports as of November account for 44.4% of this forecast export volume, which is in-line with the five-year average for the month of November.
The USDA also reports accumulated U.S. exports of 423,400 mt to Canada as of Dec. 13, up from 90,600 mt this time last year, while outstanding sales total 206,000 mt. Statistics Canada data indicates an average of 392,580 mt has been imported over the past five years.
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