According to Canada's new agriculture minister, China's import ban on canola has not affected the export of other commodities. Meanwhile, various media reports point to potential trade implications for other Canadian agricultural exports, while exporters have understandably reacted with a cautious approach in the way commodities are transacted.
As seen on the attached chart, yellow peas delivered to Saskatchewan plants held steady at $7.37/bushel from late-December to early February. Since then, this average bid has slid to this week's low of $6.53/bushel, the lowest level seen since mid-November. The range of new-crop bids has also fallen over this period, reported by Statpub.com to range from $7.10 to $7.50/bu. in mid-February, to $6.20 to $6.50/bu. reported this week.
Saskatchewan government Market Trends data show prices strengthening over the two months from early February to early April in each of the past three years, ranging from $0.09/bu. to $.66/bu., while averaging $.33/bu. over the three-year period.
As of week 35 Canadian Grain Commission data, bulk exports of peas have reached 1.3372 million tons, 10.8% higher than the same period in 2017-18, while 23.5% below the five-year average. Over the past three years, bulk pea exports, as of week 35, represented an average of 60% of total crop year exports, while this average pace would project to crop year exports of roughly 2.2 mmt, well-below the current 3.1 mmt forecast by AAFC. In 2017-18, movement was slower than average, with week 35 movement representing 39% of crop year exports, a pace that would project to exports of 3.4 mmt, higher than the current forecast and a pace of movement that would lead to extremely tight carryout stocks.
CGC data shows that cumulative exports to China as of the end of February have averaged 62% of total crop year shipments over the past three years. Once again, 2017-18 movement was at a slower pace, with 49.6% of total crop year exports shipped by the end of February. The February 2019 Exports of Canadian Grain and Wheat Flour report shows a cumulative 716,200 metric tons shipped to China, while roughly an equivalent volume could be shipped prior to the end of the crop year, given the pace of movement recorded in the previous crop year.
Cliff Jamieson can be reached at email@example.com
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