Canada Markets

Canada's Crop Exports to China as of June

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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This chart represents the monthly exports reported by Statistics Canada to China for select commodities and products through the month of June. Exports were clearly front-loaded in the crop year. (DTN graphic by Cliff Jamieson)

This week has seen a number of pieces written showing changing grain trade flows in the world, for a number of reasons. In the case of Australia, it is drought, with areas of eastern Australia now in their third consecutive year of drought.

Graincentral.com reported Wednesday that a fifth vessel of Canadian wheat is on the way to Port Kembla in New South Wales, Australia, taking the total volume shipped to around the 300,000-metric-ton level. Meanwhile, a total of 14 import applications have been filed for approval that are reported to show interest in Canada/United States wheat, canola, corn and sorghum, while there may be eventual interest in durum prior to the 2019 winter harvest in Australia.

Reuters reports on Wednesday that since Saudi Arabia has opened doors to the import of Russian wheat by easing quality parameters, Germany is being forced to seek new markets in countries such as China, Indonesia and Mexico. This could lead to a domino effect by displacing another supplier's product that in turn must turn elsewhere.

Bloomberg reported this week that despite the trade issues faced between Canada and China, China "quietly buys Canada crops." This begs a closer look.

The attached graphic shows the 2018-19 monthly exports of selected commodities and products reported by Statistics Canada to China through the month of June. This highlights the idea that exports were front-loaded in the crop year across a number of commodities and any quiet buying is being done in small volumes.

While exports of wheat to China over the first 11 months of the crop year have increased by 92% from the same period in 2018-18, June exports of 33,601 mt were down 92% from the previous month and the lowest monthly volume shipped of the first 11 months of the crop year.

When cumulative exports through the end of March are considered, which takes us to the month of the announced ban on Canadian canola by China, we see that 74% of the crop year's exports of wheat to China are accounted for, as well as 93.4% of canola, 77.5% of the canola oil, 99.6% of the soybeans, 72.4% of the peas and not shown, 80% of the barley.

It may be difficult to know what commodity trade is being harmed and to what extent, but there may be little room for optimism as we move into 2019-20.

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

Follow him on Twitter @Cliff Jamieson

(ES)

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