Canada Markets

Canadian Wheat Exports Remain Short of Target Pace

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
Connect with Cliff:
@CliffJamieson
Weekly licensed exports of wheat (green bars) continue to fall far short of the weekly volume needed to stay on track to meet the current 18.2 million metric tonne export target (blue line), as measured against the left vertical axis. Year-to-date, the spread between actual cumulative shipments (red line) is widening from the steady cumulative pace needed to hit target (black line), as measured against the right vertical axis. (DTN graphic by Nick Scalise)
Weekly licensed exports of wheat (green bars) continue to fall far short of the weekly volume needed to stay on track to meet the current 18.2 million metric tonne export target (blue line), as measured against the left vertical axis. Year-to-date, the spread between actual cumulative shipments (red line) is widening from the steady cumulative pace needed to hit target (black line), as measured against the right vertical axis. (DTN graphic by Nick Scalise)

The Canadian Grain Commission's Grain Statistics Weekly reported Canada's licensed wheat exports at 255,100 metric tonnes for week 27, or the week ending February 27. For the 11th straight week, this volume fell short of the weekly volume needed to maintain the pace to achieve the 18.2 million metric tonne target set by Agriculture and Agri-Food Canada.

Total cumulative exports are reported at 8.4322 mmt, 4.9% ahead of the year-to-date volume shipped at this time last year, but over 1 million metric tonnes behind the steady cumulative pace needed to meet the target. This is seen on the attached graph with the red line drifting below the black line, which represents the steady cumulative pace required to meet the 18.2 mmt target. Note that this analysis excludes the impact of unlicensed exports, as well as the export of flour. As of November, 347,270 mt of wheat (excluding durum) had been exported through unlicensed channels, which will help narrow the gap.

United States movement also remains behind. In his recent Newsom on the Market blog, DTN Senior Analyst Darin Newsom suggests that roughly 63% of the USDA target has been shipped, with the U.S. crop year now 70% complete. This movement is indicated to be slightly below average.

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This data arrives on a week where the USDA reports bearish numbers for both the U.S. and the global wheat situation. A Russia-Ukraine cease-fire should cool the market, although maybe not so much, given that the shooting has continued. The weak Euro and Russia's export restrictions has boosted European Union's export prospects with exports poised to move higher than last year.

Despite all the negative news, both the March hard red spring wheat and the March soft red winter wheat moved into an inverse this week, with the nearby March trading over the May contract following it. This is activity normally seen in bullish markets and a sign that commercial sentiment is not bearish at all. This could be an indication that the story is changing, but only time will tell.

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

Follow Cliff Jamieson on Twitter @CliffJamieson

(ES)

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Weekly licensed exports of wheat (green bars) continue to fall far short of the weekly volume needed to stay on track to meet the current 18.2 million metric tonne export target (blue line), as measured against the left vertical axis. Year-to-date, the spread between actual cumulative shipments (red line) is widening from the steady cumulative pace needed to hit target (black line), as measured against the right vertical axis. (DTN graphic by Nick Scalise) 
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