Canada Markets

On July 2, Statistics Canada's Canadian international merchandise report for May showed an increase in May imports combined with a decrease in May exports for all goods, with Canada's trade balance falling from a $462 million surplus in April to a $1.4 billion deficit in May. This is the second and smallest trade deficit seen in 2021 statistics.

The broad farm, fishing and intermediate food products category shows exports totaling $3.872 billion, falling for a second straight month, up 4% from the same month in 2020 but still the smallest exports reported in five months, or for 2021.

As we do each month, we look at various agriculture trade data, with a focus on crops where monthly data shows a more complete picture than the weekly Canadian Grain Commission reports.

Lentil exports were reported at 212,450 metric tons, the largest volume shipped in six months, but still well-below the volume shipped in May 2020. A significant increase in volumes to India, Bangladesh and the United Arab Emirates were largely behind the increased volume. Cumulative exports total 1.975 million metric tons, down 11% from the same period last crop year but up 4.6% from the five-year average. Year-to-date volumes account for 73.2% of the current 2.7 mmt export target and remain behind the steady pace needed to reach this forecast. Note that in 2020, over 600,000 mt was shipped in the final two months of the crop year.

Dry pea exports were reported at 360,696 mt in May, the largest volume shipped in seven months. While China remained the largest destination for the month at 174,898 mt or 48% of the total volume, it was a surge in volume to Bangladesh (100,518 mt) that was behind the increased volumes shipped this month. Year-to-date, 3.355 million has been shipped, up 1.4% from the same period last year and 15.3% above the five-year average. In June, AAFC reduced its forecast for dry pea exports by 200,000 mt to 3.7 mmt, while the current pace of movement is ahead of the pace needed to reach this forecast.

Monthly data shows 22,580 mt of chickpea exports in May, down slightly from the previous month but still the largest May exports shipped in at least 10 years. Last month's exports at 23,067 mt were the largest volume shipped since November 2017. Year-to-date exports total 127,175 mt, up 43.8% from last crop year and 16.8% higher than the five-year average. In June, AAFC increased its forecast for crop year exports by 20,000 mt or to 135,000 mt, while current exports are ahead of the steady pace needed to reach this forecast.

Canary seed exports were reported at 15,697 mt in May, the largest volume shipped in six months. A significant upswing was seen in demand from Belgium this month to 4,207 mt, the largest destination this month and the largest volume shipped to this country since November 2020. Cumulative exports total 135,387 mt, down 2.6% from the same period last crop year but up 2.6% from the five-year average. This volume signals that exports remain on track to reach the 160,000 mt forecast for the crop year, although available supplies could prove a limiting factor.

Mustard seed exports totaled 9,470 mt in May, the smallest volume shipped in three months. Cumulative exports of 93,693 mt are up 0.8% from last year and are 5.7% below the five-year average for this 10-month period. Cumulative exports account for 83.7% of the current 112,000 mt AAFC forecast, leaving the pace of exports on track to reach this forecast.

Flax exports totaled 51,884 mt in May, well-above the volume shipped in April. Belgium and China were shipped similar volumes this month, accounting for 77% of the total volume shipped. Cumulative exports total 468,101 mt, up 81.9% from the same period last crop year and 17% higher than the five-year average, while the highest volume shipped over this 10-month period in five-years. Current volumes shipped make up 86.7% of the total export forecast of 540,000 mt from AAFC, on track to reach this forecast.

Soybean exports in May totaled 211,940 mt, well-above the previous month. After no shipments last month to Iran, this country was once again the No. 1 destination with 66,000 mt or 31% of the total volume shipped. Belgium, Japan, and Indonesia were also each shipped from 25,000 mt to 30,500 mt. Total exports during the first nine months of the row crop crop-year total 4.097 mmt, up 39.4% from last year and 6.5% higher than the five-year average. This volume is roughly 89% of the current 4.6 mmt export forecast released by AAFC in June, well-ahead of the steady pace needed to reach this forecast although tight supplies may be a limiting factor.

Corn exports totaled 289,982 mt in May, the largest monthly volume shipped since May 2019. The largest percentage of the volume was shipped to Europe, or 92.6% of the total volume, with Spain the single-largest destination. Cumulative exports total 1.1254 mmt of exports through the first three-quarters of the crop year (September through August), up 205% from 2019-20 and 18.4% higher than the five-year average. In June, AAFC increased its forecast by 200,000 mt of exports to 1.4 mmt, while the current pace of exports is ahead of the steady pace needed to reach this forecast.

Canada imported 154,116 mt of corn in May, almost entirely from the U.S., which is down from the previous month while roughly 20,000 mt higher than the four-month average. A reported 1.209 mmt has been imported so far in 2020-21, slightly ahead of the pace to reach AAFC's forecast of 1.5 mmt during the crop year.

Canada exported 280,596 mt of canola oil in May, the smallest volume shipped in three months. Cumulative exports of 2.845 mmt are down 0.6% from last year while 5.8% higher than the three-year average.

Soymeal exports totaled 397,521 mt, the lowest volume of exports in eight months. Cumulative exports of 4.415 mmt are up 8.1% from the same period last crop year and 13.2% higher than the three-year average.

Canada imported 95 million litres of ethanol in May, the lowest volume imported in three months. This volume is up 53.2% from the same month in 2020, while the largest May imports in three years. Cumulative imports for 2021 of 423 million litres are up 2.4% from last year while 5.3% below the three-year average.

Canadian barley exports in May totaled 379,097 mt, down sharply from the 522,886 mt shipped in the previous month but still the third largest monthly volume shipped this crop year. A reported 94.5% of this volume was shipped to China, while the International Grains Council estimates that country will import even more in 2021-22. Cumulative exports total 3.346 mmt in the first 10 months of the crop year, up 85.2% from the same period last crop year and 109% higher than the five-year average.

Canada's barley imports were reported at 31,843 mt, up slightly from the previous month and slightly higher than the four-month average. During the first 10 months of the crop year, a reported 228,913 mt has been imported, up from 43,207 mt imported in 2019-20. The current pace of imports seem on track to reach the current AAFC import forecast of 270,000 mt if supplies remain available.

Canada's wheat flour exports totaled 13,042 mt in May, while total 142,957 mt during the first 10 months of 2020-21. This is approximately equal to 195,600 mt of grain equivalent. In addition, comparing Statistics Canada data to CCG's weekly data as of the end of May points to roughly 800,000 mt of unlicensed exports of wheat during the first 10 months of 2020-21. Wheat exports total 17.44 mmt, with 1.8 mmt needed the be shipped in each of the final two months to reach the current 21.050 mmt export forecast for wheat (excluding durum), which should be attainable.

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

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