In week 40, or the week ended May 5, the Canadian Grain Commission reported weekly exports of 154,000 metric tons (mt) through licensed facilities (green bar), down from the previous week and 500 mt lower than the previous four-week average. This was below the roughly 214,000 mt of licensed exports needed this week to remain on track to reach the current Agriculture and Agri-Food Canada export forecast of 9.8 million metric tons (blue line), which is down from the 10.726 mmt shipped in 2017-18.
Cumulative exports (red line) total 7.1764 mmt, down 10.2% from the same period in 2017-18 while 4.6% below the five-year average. This volume remains roughly 362,000 mt below the steady pace needed to reach this export demand forecast (black line). The current pace of movement projects forward to crop-year exports of 9.329 mmt, while the five-year average pace of movement would project to crop-year exports of 9.405 mmt.
Friday's USDA report saw a lower estimate in the agency's forecast for Canada's exports, expected to fall from 10.6 mmt in the current crop year to 10.1 mmt in 2019-20.
According to Friday's data release, USDA has a bearish view of global fundamentals for 2019-20 rapeseed/canola. Global ending stocks are forecast to grow by 1.6 mmt to a record 9.187 mmt, 36% higher than the five-year average. This would reflect a stocks-to-use ratio of 12.7%, the highest seen in nine years. The May estimates indicate that Canada's ending stocks are forecast to grow by a million metric tons to 4.4 mmt in 2019-20 given production of 21.1 mmt, equal to 2018 production levels.
Despite no lack of bearish data, the November canola contract posted its first higher weekly close seen in five weeks, gaining $2/mt. The new-crop Nov/Jan spread narrowed a dime to minus $6.40/mt, which reflects approximately 54% of calculated commercial carry and can be viewed as a very much neutral view of market fundamentals. This is the opposite signal that the new-crop soybean market is sending and bears watching.
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