Canada Markets

The Weekly Price Summary reported by Agriculture and Agri-Food Canada provides indications of the offers for grain by exporters from Canada's export facilities. The most recent quotation for No. 1 CWAD 12% protein from the St. Lawrence is indicated at $427.29 per metric ton, down $5.97 per mt from the previous week. While this represents the sixth consecutive week that this quotation has fallen, the rate of this drop has slowed as the global durum export market seeks a bottom. Over the previous four weeks, this quotation dropped $91.17/mt, or an average of $22.79/mt/week.

This export price indication has now retraced all of the gains achieved in the 2014/15 crop year and is the lowest seen since July 11, 2014, as seen on the attached chart.

The most recent CWB Pool Return Outlook report on April 23 lowered both old-crop and new-crop price prospects, suggesting that favorable conditions in Europe and North Africa along with the strengthening Canadian currency and high volumes of durum pushed into the system were weighing on prices. The most recent Canadian Grain Commission Grains Statistics Weekly indicates a total of 3.7259 million metric tons have been delivered by Canadian producers in the 2014/15 crop year as of week 38, up 6.3% from a year ago and 15.8% above the three-year average for this period.

Reports suggest that buyers may be content to wait for quality supplies this fall. Statistics Canada reported that producers will seed 5.5 million acres this spring, up 15.8% from last year. Given the five-year average yield of 40.2 bushels per acre and 98% of this acreage harvested, production could reach 5.9 mmt, the second-highest production seen since 2005 and 1.2 mmt above the five-year average.

While the recent trend in price may make it difficult to accept such an increase in acres, early planting may be supportive to even more acres. Saskatchewan Agriculture's crop report as of April 27 indicated that 2% of the provinces total crop had been seeded, up from less than 1% last year. As well, USDA's North Dakota Crop Progress and Condition report indicates that 26% of the state's durum crop was seeded as of May 3, up from 1% last year and the five-year average of 13%. This state is expected to plant 53% of the U.S. acreage. As well, 40% of Montana's crop has been seeded, up from last year's 8% and the five-year average of 22%. Montana is expected to seed 35% of the U.S. acreage.

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

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