China's Market Access and Canadian Soybeans
Since March 1, the canola issue has been front and center in Canada's market access issue with China, while Canada's government has been quick to state that no other commodities are officially implicated. The issue has only recently expanded to include problems with two Canadian hog plants, indicated to be linked to paperwork issues, as well as two livestock genetics operations. Canada's new agriculture minister has stated the recent developments could be due to simple administrative issues, and in a press release warned exporters to use the right forms and key on filling them out correctly.
Following the federal government's move to increase available loans from the Advance Payment Program for all producers to $1 million based on stored grain, while increasing the interest-free portion from $100,000 to $500,000 for canola growers, Soy Canada has responded by requesting the government increase the interest-free portion for all producers, as indicated in a CBC report. Soy Canada has pointed out that soybean exports have dried up since January, as has been discussed by DTN following the release of weekly and monthly export statistics since January.
As of Dec. 31, the Canadian Grain Commission reported cumulative exports of soybeans at 3.237 million metric tons, up 19.4% from the same period in 2017-18. Looking back to the end of 2018, exports totaled 1.345 mmt in November, of which 99.6% was sent to China, while in December, an additional 792,800 mt was exported, of which 84% was shipped to China.
Then came 2019. In January, the CGC reported 68,300 mt exported, of which 10.8% was shipped to China. In February, 22,300 mt was shipped, with 12.1% destined for China. The CGC recently released March data, with 27,100 mt shipped, with nothing shipped to China. In the January-through-March period, Canada exported a total of 117,700 metric tons, while over the past three years, exports have averaged 578,267 mt over this period. As of the end of March, CGC data shows cumulative exports at 3.3548 mmt, up just 4.4% from the same period in 2017-18.
Based on the historical pace of exports, it would appear that Agriculture and Agri-Food Canada's current 5.5 mmt export forecast remains optimistic. On average over the past five years, cumulative exports reported by the Canadian Grain Commission accounted for 68.5% of total crop year exports, a pace that projects forward to exports of 4.9 mmt. When a shorter three-year window is considered, week 39 shipments represent an average of 72.5% of total crop year exports, which projects forward to crop year exports of 4.6 mmt.
Cliff Jamieson can be reached at firstname.lastname@example.org
Follow him on Twitter @Cliff Jamieson
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