Canada Markets

Total exports of the major Canadian grains reported in the monthly Canadian Grain Commission's Exports of Canadian Grain and Wheat Flour indicate exports to be 8% below year-ago levels as of the end of September, largely due to the later harvest on the Prairies.

Exports of Canadian wheat (excluding durum) in the first two months of the crop year total 2.4583 million metric tonnes, up 3.8% from year-ago volumes. Given Agriculture and Agri-Food Canada's current export projection of 16 mmt, which includes exports of flour, the current year to date volume is 7.8% behind the steady pace required to meet the current target. Unlicensed shipments of 107,669 metric tonnes in August as well as 15,443 mt of flour exports in August bring year-to-date exports slightly closer to target.

The three largest customers year-to-date are Indonesia at 319,600 mt, the U.S. at 276,300 mt and Mexico at 270,300 mt. An additional 107,669 mt of unlicensed movement of wheat to the U.S. in August was also noted. Some of the largest year/year growth in sales volumes took place in China, with a 253% increase, Indonesia with a 142% increase and Mexico with an 89% increase. While Brazil did not import any wheat from Canada in the first two months of 2012/13, 87,800 mt have been shipped so far this crop year.

Exports of Canadian durum for August and September totaled 686,000 mt, 2.65% below year-ago levels. AAFC's current annual target for wheat exports is 4.5 mmt, leaving current 2013/14 year-to-date exports slightly behind the steady pace required to meet the annual target. Largest importers year to date include Italy at 198,300 mt, Morocco at 85,700 mt and Venezuela at 78,400 mt.

The largest year/year volume growth took place in Italy, at a 211% increase, the United States with a 134% increase and Japan with a 122% increase in volume through the end of September over 2012/13. Year-to-date exports to Morocco, however, have fallen by 59.5% to 85,700 mt.

One point of interest is the shift in the direction of movement for durum so far this crop year. Over the course of the 2012/13 crop year, 14.7% of the durum was shipped through Vancouver, with the balance exported through eastern ports. Data from the first two months of the 2013/14 crop year indicates that 43% of the year-to-date volume has been shipped through Pacific Ports. The most recent Weekly Price Summary from AAFC indicates the October 11 quotation for 1 CWAD 13% protein wheat on the west coast is $341/mt which compares to the $323.45/mt export quotation for the same grade from St Lawrence terminals.

Year-to-date canola exports to the end of September are 706,300 mt, 36.9% behind year-ago levels. Given the AAFC's most recent target of 8 mmt of exports in the 2013/14 crop year, the current pace of exports are well below the target of 1.333 mmt by the end of September, given the assumption of a steady pace of movement throughout the crop year.

The highest year-to-date volume customers include 311,100 mt to Japan, 189,800 mt to China and 144,700 mt to Mexico. The largest year/year growth in exports is to the U.S., where volumes have grown 81% to 60,700 mt in the first two months of this crop year. China's year-to-date imports are 51% below year-ago levels as of the August through September period, volumes that are largely replaced by Australian imports.

Dry pea exports as of the end of September were 511,800 mt, 35% higher than year-ago levels. Given the current target of 2.750 mmt of exports as released in the October 16 Canada: Outlook for Principal Field Crops, the current pace of movement is 11.7% above the pace required to meet the annual target, given a steady pace of movement. The largest year/year gain was seen in business with China, with a year to date increase in volume of 185% to 302,700 mt. India's import volume, however, fell 43% to 153,200 mt, off-setting gains into China.

Exports of both oats and barley are well below the year-ago pace as well as the steady pace required to meet targets set by AAFC. Notable is a 47% reduction in oat exports to the U.S from the first two months in the 2012/13 crop year. This is suggested to be partially due to logistical delays and is tied to the current inverse in the Dec/March oat spread, which closed at 23 1/2 cents in Thursday's trade.

Cliff Jamieson can be reached at cliff.jameison@telventdtn.com

(ES)

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