Canada Markets

Canadian Wheat Exports Remain Strong

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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The green bars represent the weekly licensed exports of Canadian wheat, while the blue line represents the amount needed each week to reach the current Agriculture and Agri-Food Canada export forecast, both measured against the primary vertical axis. The black line represents the steady pace needed to reach the forecast, now at 18.8 million metric tons, while the red line represents the actual cumulative volume, both plotted against the secondary vertical axis. (DTN graphic by Cliff Jamieson)

Canada's wheat exports (excluding durum) remain solid as we move into the final weeks of the 2018-19 crop year. Week 43 exports through licensed channels, covering activity for the week ending May 26 (excluding durum) was reported at 462,000 metric tons, while the previous week saw 531,400 mt shipped, for a two-week total of 993,400 mt. This is the largest two-week volume shipped for several crop years, while cumulative shipments as of week 43 are 13.9% higher than the same period in 2017-18 and 14.6% higher than the five-year average.

As seen on the attached chart, the weekly volume shipped through licensed facilities (green bars) exceeded the weekly volume needed each week to reach Agriculture and Agri-Food Canada's latest crop year export estimate of 18.8 million metric tons (blue line) in four of the past six shipping weeks, while excluding the effects of unlicensed exports and the export of flour. This 18.8-mmt export demand forecast was revised higher by 100,000 mt in May's supply and demand tables.

While a simple ratio would project forward to crop year exports of 18.4 mmt, below the current government forecast, the historic pace of movement would point to the potential for exports to exceed current forecasts. Over the past five years, an average of 77.7% of total crop year exports were reported in the CGC's week 43 cumulative export volume total, a pace that would project forward to crop year exports of 19.7 mmt, or 900,000 mt higher than the current government forecast.

Durum exports as of week 43 total 3.544 mmt, up 5.5% from the same period in 2017-18 while 5.9% lower than the five-year average. While AAFC recently revised its export forecast higher by 100,000 mt, to 4.2 mmt, the current pace could allow volumes to exceed this target. Over the past five years, an average of 78.4% of total crop year exports were realized as of week 43. This pace would project forward to total crop year exports of 4.5 mmt, or 300,000 mt higher than current forecasts.

The projected wheat and durum exports based on the five-year average pace of movement would result in Canada's all-wheat exports of 24.2 mmt, in-line with the USDA's 24 mmt forecast and compares to AAFC's May estimate of 23 mmt.

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Cliff Jamieson can be reached at cliff.jamieson@dtn.com

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