Canada Markets

Canada's Trade Results Continue to Disappoint

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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Canada's trade deficit with the world was reported at $3.3 billion for the month of May, down from $3.3 billion in April and the eighth consecutive deficit month, according to Statistics Canada data. A record deficit was posted in March at a level of $3.5 billion. Despite Canada's low dollar, the country's recovery remains stalled with renewed talks of a potential interest rate cut as early as next week.

Total Canadian exports were reported at $42 billion for the month of May, the fifth consecutive monthly drop. Total exports reported in the farm and fishing and intermediate food products category was reported at $2.567 billion for the month, down 2.5% from the previous month. In the five months from January through May, this category's contribution to total exports totaled $13.087 billion, up 4.3% from 2014.

The value of wheat exported in May totals $658.7 billion, a three-month high. Calendar year to date, wheat exports are reported as being 8.7% above the same five-month period last year.

Canola exports (measured in dollars) totaled $406.7 million in May, down from April but the second-highest dollar value shipped in the five months since January while down 8% from last year.

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Looking at some of the smaller crops:

Lentil exports for May were reported at 253,393 metric tons, the highest volume in seven months. So far this crop year, 1.928 million tons have been shipped, already above the 1.8 mmt export target set by AAFC in the June supply and demand tables, suggesting that revisions will come to both 2014/15 and 2015/16 tables. This volume is 34% above year-ago volumes while 56% higher than the three-year average for this time. India was the largest buyer of nearly 114,500 mt in May, following a poor Rabi crop in India and uncertainty surrounding the current Kharif, or summer crop. Over the past three years, an average of 278,000 mt was shipped to all countries in the final two months of the crop year, although this may prove challenging given tight prairie supplies. 2014/15 exports have already reached a new crop-year record.

Dry pea exports in May totaled 298,718 mt, the highest monthly volume shipped in seven months. Since the start of the crop year in August, 2.779 mmt have been shipped, 30% above the same date last year while also 30% above the three-year average. Again, India was by far the largest buyer at 193,503 mt, the largest monthly shipments to this country since September. Year-to-date exports are on track to meet or exceed the current AAFC estimate of 3 mmt for 2014/15, with a three-year average of 373,000 mt shipped in the last two months of the crop year, which could see current-year exports rival the 2010/11 export record of 3.0122 mmt.

Mustard exports in May totaled 11,972 mt, the highest monthly volume in six months and the second highest monthly exports this crop year. So far this crop year, exports total 106,059 mt, 92.4% of last year and 2.4% above the three-year average. Two countries dominated shipments in May, with 4,138 metric tons shipped to the United States while 3,832 mt were shipped to Belgium. Year to date exports may be close to reaching the 130,000 mt export target set by AAFC, with an average of roughly 20,700 mt shipped in the final two months of the crop year over the past three years. Old-crop marketing's will likely slow, however, with Saskatchewan Agriculture's latest crop report suggesting only 18% of the mustard crop rated good to excellent while 30% of the crop is rated poor to very poor.

Canary seed exports in Canada totaled 17,120 mt in May, the highest monthly volume shipped in 6 months. Belgium was by far the largest buyer at 6,327 mt, after smaller shipments were recorded to this country in August and September of this crop year and the largest monthly shipment to this country since June 2014. Year-to-date, 147,259 mt has been shipped, 15% above the same period last year and 24.5% above the 3-year average and a cumulative volume which may be on track to reach the 170,000 mt target set by AAFC. In the past three years, an average of close to 24,000 has been shipped in the final two months of the crop year, while last year close to 36,000 mt were shipped in the June/July period. Canary seed marketing's may also slow, with Saskatchewan Agriculture's latest crop report rating the crop at 35% good to excellent, while 36% of the crop is rated poor to very poor. Old crop bids averaging 23.86 cents/lb delivered Saskatchewan plants and a range of 22 to 27 cents for new-crop fail to indicate any sense of urgency and indicate that supplies remain higher than past government forecasts indicate.

May exports of sunflower seed totaled 2,002 mt, the smallest monthly shipments in seven months. Year-to-date exports of 27,246 mt are just 65.5% of last year's volumes and 77.9% of the three-year average. Exports seem likely to fall short of the AAFC target of 40,000 mt in the 2014/15 crop year, with an average of 6,723 mt shipped in the final two months of the crop year over the past three years.

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

Follow Cliff Jamieson on Twitter @CliffJamieson

(SK)

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