Canada Markets

Statistics Canada reported an increase in both imports and exports for all merchandise in October, while Canada's trade surplus grew for a third month to $2.1 billion, which commentary states is the largest surplus in 2021 although its table data clearly shows the June 2021 surplus of $2.258 billion was larger.

The agency points to a rebound in exports of automobiles with an easing of the chip shortage, while exports of energy products also surged during the month. Commentary also points to a 5.6% increase in the exports of farm, fishing and intermediate food products category with a jump in canola exports noted. Exports in this category were reported at $4.115 billion, the highest reported in seven months while 7.3% higher than reported for October 2020.

Each month we look at miscellaneous trade data for grains and grain products, with a focus on those grains where weekly Canadian Grain Commission statistics fails to tell the whole story.

Statistics Canada reported 200,385 metric tons (mt) of lentils were exported in October, with 97,058 mt sold to Turkey and 24,967 mt sold to the United Arab Emirates. Exports to India were sharply lower, at 16,036 mt, down from 103,254 mt shipped in the previous month. Cumulative exports of 570,120 mt are down 28.2% from last year and 1.3% below the five-year average for this period. This volume has reached 30% of the 1.9 million metric tons (mmt) export forecast released by Agriculture and Agri-Food Canada (AAFC), although Statistics Canada reduced its lentil production forecast by 196,300 mt this month, which will require a similar lower revision in the export forecast. Given this logic, current exports represent 33% of the projected export forecast.

Dry pea exports were reported at 215,942 mt in October, down sharply from the previous month and the lowest October volume shipped in at least 12 years. A reported 65% of this volume was shipped to China, although this volume was also down sharply from the previous month. During the first three months of the crop year, exports total 822,710 mt, down 37.8% from the same period last crop year and down 27.3% from the three-year average. The cumulative volume shipped represents 35.8% of the current AAFC forecast of 2.3 million metric tons, although this month's Statistics Canada production estimate was revised lower by 268,600 mt, which will require the export forecast to be revised lower by a similar amount. As a result of this required revision, current exports represent 40.5% of projected crop year exports.

Chickpea exports totaled 9,290 mt in October, the lowest volume shipped in nine months. Cumulative exports of 31,920 mt are up 34.4% from the same period last crop year and 22.7% higher than the five-year average. In November, AAFC revised its forecast lower by 30,000 mt, to 120,000 mt, while cumulative exports are slightly ahead of the pace needed to reach this volume. This month's Statistics Canada production estimates resulted in a 12,100 mt increase in its production estimate for chickpeas to 76,000 mt.

Mustard seed exports totaled 8,821 mt in October, the largest volume shipped in four months. Cumulative exports total 23,850 mt, down 5.1% from the first quarter of 2020-21 and 12.7% below the five-year average. This volume represents 34% of the 70,000 mt export forecast released by AAFC in November, which was revised 5,000 mt lower from the previous month. The pace of exports is ahead of the steady pace needed to reach this forecast.

Canary seed exports totaled 12,524 mt in October, the largest volume shipped in four months. Cumulative exports total 29,338 mt, down 10.7% from the same period last crop year and 10.9% below the five-year average. This accounts for 24.4% of the current AAFC forecast of 120,000 mt, which was revised 5,000 mt lower in the November report. Last week's final production estimate from Statistics Canada pegged the prairie canary seed crop at 109,000 mt, which is down only 3,000 mt from the estimate used by AAFC.

Canada exported 22,072 mt of flax in October, the largest volume shipped in five months. Approximately 53% of this volume was shipped to the United States, while both China and Belgium volumes were increased sharply from the previous month. Exports during three months total 46,276 mt, down 47.6% from the same period last crop year and down 47.4% from the five-year average. Total exports have reached 16.7% of the steady pace needed to reach the current 375,000 mt forecast from AAFC, while it is important to note that AAFC revised lower its forecast for flax production by 32,800 mt, which will require a corresponding move in the government export forecast.

Canada exported 611,165 mt of barley in October, the largest volume shipped in any single month in at least the last five years, with 97.3% of this volume shipped to China. During the first three months of the crop year, 988,621 mt has been shipped, up 32.6% from the same period last crop year and 136% higher than the five-year average for this period. This represents 44% of AAFC's current 2.250 mmt forecast, which was revised 200,000 mt higher in November. This increase may be difficult to achieve, with Statistics Canada revising production lower by 193,300 mt lower this month.

Oat exports in October came in at 171,442 mt, the largest monthly volume shipped in 10 months although the smallest October exports reported in five years. Cumulative exports total 508,308 mt, down 27.7% from the same period last crop year and down 12.4% from the five-year average. In November, AAFC revised its export forecast higher by 50,000 mt to 1.850 mmt, while the current pace of exports is ahead of the pace needed to reach this forecast. Statistics Canada's latest production estimate included a 27,300 mt increase in forecast production, to 2.606 mmt, although the harvested acre percentage is equal to the five-year average and seems suspicious in a year where feed supplies were tight on the Prairies. This bears watching.

Corn exports totaled 31,333 mt in October, with 73% destined for the U.S. and the balance almost all shipped to Ireland. During the first two months of the row crop crop year, exports total 89,695 mt, up 17.1% from the same two months in 2020 while 12% higher than the five-year average. Exports have covered just 6% of AAFC's current export forecast of 1.5 mmt and behind the pace needed to reach this volume of exports, while this forecast was revised 100,000 mt higher in November.

Corn imports in October totaled 255,566 mt, the largest monthly volume imported since July 2019. Over two months of the 2021-22 row crop crop year, Canada has imported 421,830 mt, up 33.6% from the same period while behind the steady pace needed to reach the current 3 mmt forecast released by AAFC.

October data shows Canada exporting 973,184 mt of soybeans, the largest monthly volume moved since November 2018. This volume was split between 33 countries, with Italy the largest destination at 127,604 mt. During the first two months of the crop year, exports total 1.078 mmt, up 6.2% from the same period last crop year while 23.9% higher than the five-year average. The pace of exports is ahead of the steady pace needed to reach the current 4 mmt forecast released by AAFC, while this month's final production estimates included a 385,700 mt upward revision in Canada's soybean production, which should allow for an upward revision in exports by a similar amount.

Exports of canola oil were reported at 249,504 mt, the largest volume shipped this crop year. Cumulative exports total 644,594 mt, down 18.1% from the same period last crop year and down 19.7% from the three-year average.

Canola meal exports are shown at 432,799 mt, the largest volume shipped in four months. Cumulative exports total 1.160 mmt, down 8.1% from last year and 1.2% higher than the three-year average.

Imports of ethanol totaled 135 million litres in October, which is one of the largest monthly volumes ever imported, if not the largest. During the 10 months of 2021, imports are up 3.7% from the same period last year while 0.7% below the three-year average.

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