Canada Markets

As seen by the green bars on the attached chart, three of the largest weekly volumes of durum shipped this crop year have taken place in the past six weeks. Week 39 licensed shipments of 247,800 metric tons is the largest weekly volume shipped in data checked over the past five years, while week 37 shipments of 232,800 mt is close to the largest weekly volume shipped over the same period.

Over this six-week period, (weeks 34 through week 39), exports were split between the West Coast and the St Lawrence, with Vancouver terminals shipping 470,500 mt, while St Lawrence ports shipped 379,400 mt. A further 19,200 mt was exported from Thunder Bay.

The Canadian Grain Commission's monthly Exports of Canadian Grains and Wheat Flour report shows 530,000 mt of durum exported from licensed facilities in the month of March, up from 260,300 mt shipped in February and 358,600 mt shipped in March 2018. A look back in Statistics Canada's merchandise trade database would indicate that monthly volumes shipped (including unlicensed exports) have not exceeded this volume since February 2016.

The largest year-over-year increase in exports by customer are reported for Tunisia (132,800 mt), Turkey (200,400 mt) and the U.S. (60,900 mt) as of March data. In addition, four new countries were added to the list where no sales were reported as of March 2018; Portugal, Libya, Kuwait and Chile, having been exported a combined 81,400 mt. Exports to Algeria are down 378,200 mt as of March, although an April 29 report by brecorder.com indicated that Algeria purchased "at least 200,000 tonnes" for June delivery, with expectations that this volume will be largely sourced from Canada.

As seen on the attached graphic, in week 37, the cumulative volume of exports (red line) moved above the black line that represents the steady pace needed to reach Agriculture and Agri-Food Canada's most recent export forecast of 4.1 million metric tons for the 2018-19 crop year. Note that earlier in the crop year, AAFC's export forecast was pegged at 4.8 mmt, while has since slipped to 4.6 mmt, then 4.3 mmt, then 4.2 mmt, while most recent monthly reports have pointed to a 4.1-mmt export forecast. This would be the lowest volume shipped since the 2011-12 crop year and contributing to a significant 40.3% year-over-year increase in stocks to an estimated 2 mmt as seen in the April Outlook for Principal Field Crops.

Over the past five years, week 39 licensed exports represented an average of 71.6% of total crop year exports, a period that accounts for the first 75% of the crop year. This historical pace projects crop year exports of 4.429 mmt in 2018-19, a less bearish outlook.

Another supportive nugget is seen in commercial stocks, which at 633,700 mt as of week 39, is well-above the 444,000 mt reported for the same week in 2017-18 while slightly higher than the five-year average. On May 7, Statistics Canada will release its official March 31 estimates for both farm and commercial stocks.

On May 2, pdqinfo.ca shows No. 1 Canada Western Amber Durum (CWAD) 13% protein bids ranging from $236.03/mt to $243.30/mt ($6.42 to $6.62/bushel) across Saskatchewan. A look at the southeast Saskatchewan data shows a May 2 bid of $243.30/mt, while price history shows this bid changing little since late January. While global trade information is sparse, a weekly European Commission report shows export prices FOB the Port-la-Nouvelle in France at $251 USD as of April 30, down 2% over the past month while 2% higher than the year-ago level. The same report, with data sourced from the International Grains Council and France Agrimer, provides a line for St. Lawrence prices although has not reported data for some time.

Despite lower acres expected to be planted, prices remain inverted, with deferred bids for the same region of Saskatchewan reported at $232.89/mt for September and $228.85/mt for October.

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