Canada Markets

Canada's merchandise trade surplus grew to $1.9 billion in September, a fourth consecutive trade surplus, with both imports and exports falling from the previous month. Commentary points to a drop in both the import and export of vehicles and vehicle parts as a major factor this month, largely tied to supply chain issues and the movement of computer chips.

The following is a look at various crop and crop products trade, with a focus on grains where weekly Canadian Grain Commission data falls short of capturing all activity.

September lentil exports were reported at 280,258 metric tons (mt), up sharply from the previous month and the highest volume shipped in 11 months. India and Turkey were by far the largest buyers this month, accounting for two-thirds of the total volume shipped, with monthly shipments to India the largest since Oct. 2020, or one year. Cumulative exports of 370,483 mt are down 15% from the same period last year, with AAFC forecasting crop year exports down 18% year-over-year. At the same time, year-to-date exports are up 9.9% from the five-year average for this period. Exports to-date are ahead of the pace needed to reach the current 1.9 million metric ton (mmt) forecast.

Dry pea exports in September total 492,982 mt, the largest monthly volume shipped since September 2020. The largest destination was China, with 85% of the volume shipped to this country. Year-to-date exports of 607,029 mt are down 31.7% from the same period last crop year, at a time when AAFC is forecasting exports to fall by 36% to 2.3 mmt this crop year. Cumulative exports are also down 22.2% from the five-year average for this period, while the current pace of movement is well-ahead of the steady pace needed to reach the current export forecast.

Chickpea exports totaled 10,956 mt in September, down slightly from the previous month and the lowest monthly volume shipped in eight months. Cumulative exports at 22,631 mt is up 36.9% from the same week last crop year and 69.9% higher than the five-year average, while AAFC is estimating crop year exports of 150,000 mt, unchanged from the previous crop year. The current pace of exports is close to the steady pace needed to reach the current AAFC forecast.

Mustard exports totaled 7,445 mt in September, down from the previous month. Year-to-date exports are down 5.5% from the same period in 2020-21 and are 9.5% below the five-year average for this two-month period. This comes at a time when AAFC is forecasting export shipments down 32.4% from the previous crop year. Current exports account for 20.1% of the current forecast, ahead of the steady pace needed to reach this forecast.

Canary seed exports were reported at 7,774 mt, which is the lowest monthly volume shipped since October 2016. Cumulative exports are down 17.7% from the same week last crop year, while at a time when AAFC is forecasting a 20.9% drop in canary seed exports. At 16,814 mt, cumulative exports are well-ahead of the steady pace needed to reach this forecast.

Flax exports totaled 11,819 mt in September, the lowest monthly volume shipped in 12 months. For the fourth straight month, the largest share was shipped to the U.S., with 78% of the volume shipped to the U.S. in September. Exports during the first two months are down 56.3% from the same period last crop year and down 62.9% from the five-year average. The current pace of exports is behind the steady pace needed to reach the current AAFC forecast of 375,000 mt, which is down 27.7% from volume exported in 2020-21.

September's soybean exports totaled 104,557 mt, the smallest monthly volume shipped since April 2019. While not a substantial volume, the largest share was shipped to China, totaling 29,112 mt or 27.8% of the total. After just one month of the 2021-22 row crop's crop year, exports are down close to 50% from last year and 36.7% below the five-year average. Current exports are well-behind the pace needed to reach the current export forecast of 4 mmt, with exports forecast down 11.5% from the 2020-22 crop year.

Corn exports in September totaled 58,383 mt, the largest September volume shipped in three years. The largest share, or 60% of this volume, was shipped to Portugal, while the next largest volume was shipped to the U.S. This month's exports were up 148% from the same month in 2020 and 30% higher than the five-year average. The current pace of exports is well-below the volume needed this month to stay on track to reach the current 1.4 mmt export forecast.

September corn imports were reported at 166,264 mt, the largest volume imported since September 2020. The current AAFC forecast points to imports of 3 mmt, up 100% from the previous crop year. The 1.5 mmt increase in the corn import forecast offsets a 1.1 mmt drop in the forecast for barley and 372,000 mt drop in the forecast for wheat found in the Feed, Waste and Dockage estimate on AAFC tables.

Canada exported 366,044 mt of barley in September, the largest volume shipped in four months, with 97% destined for China. This month's exports of barley were only 1% below the volume shipped in 2020 over the same period while 103% higher than the five-year average. After just one month, exports account for 18.4% of the current 2.050 mmt forecast (grain plus barley product exports), well-ahead of the pace needed to reach this forecast.

September exports of oats totaled 169,071 mt, the largest monthly volume shipped in nine months. Cumulative exports of 336,863 mt is down 15.6% from the same month in 2020, while down 4.8% from the five-year average. Current exports account for 18.7% of the current 1.8 mmt export forecast, which includes grain and grain product exports, well-ahead of the pace needed to reach this forecast. AAFC is currently forecasting 2021-22 oat exports (including products) to fall by 38.5%.

Canola oil exports totaled 202,042 mt in September, up from the previous month. Cumulative exports of 395,090 mt are down 25% from the previous year and 25% below the three-year average.

Canola meal exports reached 361,914 mt in September, down slightly from the previous month. During the first two months of the crop year, 726,768 mt of canola meal has been exported, down 4.5% from the same period in 2020-21 and 6% below the three-year average.

Ethanol imports in September totaled 132 million litres, the largest monthly imports seen since September 2018. During the first nine months of this calendar year, imports of 903 million litres are up 3.3% from the same period in 2020, while 2.5% below the three-year average.

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

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