Canada Markets

The Canadian Grain Commission reported 231,500 metric tons (mt) of barley exported in week 12, or the week ending Oct. 24, the highest weekly volume shipped during the first 12 weeks of the 2021-22 crop year. Movement has been brisk for the past five weeks, although the latest week's movement is well-above the four-week average of 149,350 mt.

One can assume that the largest share of this volume is headed for China as that country seeks alternatives to corn, with this week's release of the CGC's Exports of Canadian Grain and Wheat Flour report for September showing 98.6% of total licensed exports shipped to China, with the remaining balance to the U.S.

As seen on the attached graphic, Canada's barley exports through licensed facilities as of week 12 remain are up 23.4% from the same week in 2020-21 at 924,900 metric tons and 93% higher than the three-year average. This comes at a time when Statistics Canada is estimating barley production in 2021 at 7.1 million metric tons, the smallest in seven years. Barley supplies for 2021-22 are currently estimated by AAFC at 8 mmt, down 33.3% from the previous crop year and a record low according to AAFC.

In addition to the barley already shipped, the CGC reports a further 512,800 mt of barley in commercial storage, of which 312,400 mt is situated in country elevators and 156,000 mt is instore Vancouver terminals. This volume is similar to the 515,900 mt in commercial storage this time last year and is 15.9% higher than the three-year average.

AAFC is currently estimating barley exports at 2.050 mmt for 2021-22, including products), down sharply from 4.572 mmt in 2020-21, while forecast to drive stocks to an all-time low. In the 2020-21 crop year, exports of grain reported by the CGC is shown at 3.7109 mmt, as seen in the July Exports of Canadian Grain and Wheat flour report, which accounts for 81% total exports. The difference is made up of unlicensed exports and the export of barley products.

If one assumed the same ratio between grain and product exports for the current crop year, grain exports would total 1.661 mmt in 2021-22, which would indicate 56% of exports have been reached in the first 12 weeks of the crop year. When commercial stocks are taken into account, the volume of grain either shipped or in storage accounts for 86.6% of the 1.661 mmt.

Malt quality barley will be tight on the Prairies due to this year's hot and dry summer and the resulting higher protein. The CGC has reported the average protein in barley selected for malting averages 12.8% protein, up from 11.8% last year and the 10-year average of 11.7%. This may lead to additional supplies destined for exports.

Statistics Canada estimates indicate 90.2% of the 2021 crop was harvested in 2021, down slightly from 91.8% in 2020 but higher than the five-year average of 89.7%. A potential revision may be expected when Statistics Canada reports in early December, which bears watching.

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

Follow him on Twitter @Cliff Jamieson

(c) Copyright 2021 DTN, LLC. All rights reserved.