Canada Markets

The blue line on the attached chart shows the cumulative year-over-year increase in canola exports to Europe in 2019-20 as of June, or the 11th month of the crop year. The Canadian Grain Commission's Exports of Canadian Grain and Wheat Flour report for the month of June shows cumulative exports to Belgium, France, German, Greece and Portugal totaled 1.9925 million metric tons, which is 1.4652 mmt higher than reported shipped to these countries in the previous crop year. The European Union's weekly tables show 6.485 mmt of canola/rapeseed imported in 2019-20 (July 1 2019- June 30 2020), up 53.3% from the previous crop year and a blessing for Canada's industry.

The brown line shows the year-over-year change in movement to China. The cumulative year-over-year decline in exports grew larger from August through February, although a recent spike in interest has reversed this trend. As of June, the year-over-year decline in exports is reported at 1.4076 mmt. For the first time this crop year, the year-over-year increase in exports to Europe has exceeded the year-over-year decline in exports to China.

As mentioned, this has been partially made possible by a late-crop year surge in China's interest (or need) in Canada's canola. In the four months from March through June, exports to China were reported at 936,300 metric tons, including being the largest monthly destination in the months of May and June.

This information can be viewed as mixed, Statistics Canada data shows 2019-20 exports to China in the March through June period more than double the 444,061 mt volume shipped in the same period of 2019-20, although the average of the four years prior (2014-15 through 2017-18) shows 1.560 mmt moving in this four-month period.

The Canadian industry faces a similar circumstance in 2020-21, with the EU poised to import a similar volume to the 2019-20 crop year, estimated at 6 mmt by the USDA's Oilseeds World Markets and Trade report in July. This could be even more attractive for Canada's industry given that a recent Agritel estimate has pegged Ukraine's production at 2.52 mmt, down from 3.35 mmt in 2019. Slightly more than 50% of the EU's's imports were sourced from Ukraine in 2019-20.

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

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