Canadian canola exporters will have a lot less product to export this crop year and seem in no hurry to move it. In week six, the Canadian Grain Commission reports just 13,700 metric tons (mt) were exported, which is the second-lowest weekly volume shipped in the six weeks of this crop year, while the weekly average is only 49,333 mt.
As of week six, or the week ended Sept. 12, cumulative exports are reported by the CGC at 297,100 mt, down 75.1% from one year ago and 67.7% below the three-year average.
The most recent Grain Statistics Weekly for week six or the week ended Sept. 12 shows producers have delivered a cumulative 1.0257 million metric tons (mmt) into the primary elevator system, while harvest pace is well ahead of average. While this volume is 25% below the pace of deliveries over the same period in 2020-21, it is only 2.7% below the three-year average for the same week.
At the same time, movement of canola from the Prairies has been slow. The AG Transport Coalition shows the two major railways performing well, spotting from 90% to 97% of the hopper cars wanted for loading over the first six weeks of 2021-22. Despite this performance, unloads of canola at Canada's export terminals has been slow. Over the first six weeks, only 275,100 mt has been unloaded at the terminals, down sharply from 1.2792 mmt unloaded in the same period last crop year and the three-year average of 973,000 mt.
As a result, commercial stocks of canola are seen growing in week six for a third consecutive week, jumping by 60% from week five to week six to 962,800 mt. Of this volume, 77.6% or 747,000 mt is situated in primary elevators, a volume that grew by 119%, week-over-week. Over the past three years, primary stocks of canola in week six averaged 60% of total commercial stocks.
Cumulative exports over six weeks are well below the steady pace needed to reach the August Agriculture and Agri-Food Canada forecast of 7 mmt, although three Statistics Canada reports have been released since AAFC released this forecast. When the most recent July 31 stocks report and Sept. 14 production estimates are taken into account, implied 2021-22 supplies would be 14.5 mmt, or 1.3 mmt less than the August AAFC forecast. Splitting this shortfall evenly between crush and exports would result in a 650,000 mt lower revision to exports, or to 6.350 mmt. Note that AAFC will release their updated September forecast any day now.
While the 6.350 mmt is down 40% from the volume shipped in 2020-21, the current pace of movement still falls well short of reaching this volume.
Despite the smaller crop and an expected sharp reduction in year-over-year exports, the Vancouver track basis was reported to weaken $5/mt to $80 over the November contract this week, which bears watching.
Cliff Jamieson can be reached at email@example.com
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