Canada Markets

The impact of Canada's weaker dollar is perhaps achieving the intended consequences as indicated in Wednesday's favorable Statistics Canada Canadian international merchandise trade report for the month of June. Canada's trade deficit with the balance of the world was reduced to $476 million in June from the $3.37 billion reported the previous month, much smaller than the $2.9 billion expected by economists. This is the smallest monthly trade deficit reported since November after posting consecutive deficits since October and reaching a record monthly deficit of $3.434 billion in the month of March.

Total Canadian exports of all merchandise were up 6.3% in June, the first month-to-month increase since December and also the largest month-to-month increase seen since December 2006.

Nine of 11 sub-groups reported increases in exports this month, including the Farm and Fishing category, which were reported at $2.1398 billion in June, up 0.7% from May. Year-to-date exports in this group are reported at $12.850 billion, up 3.9% from the same period in 2014 and 14.4% above the three-year average for the first six months of the calendar year. Wheat exports in June were valued at $715.7 million, a four-month high, the second-highest monthly dollar value exported this calendar year and the third highest in the August through July 31 crop year. The value of canola exports in June was reported at $403.7 million, down slightly from May and a three-month low.

Looking at some of the export data provided for selected smaller crops, lentil exports in June were reported at 131,528 metric tons, down sharply from the previous month, while understandably the lowest monthly export volume seen this crop year given the tight stock situation. Year-to-date exports (crop year) total 2.059 million tons, 29.9% above the reported volume at the same time last year and 50.7% above the three-year average. This volume is already ahead of the 1.8 mmt export target set by AAFC.

Dry pea exports totaled 165,017 mt in June, also sharply lower than the previous month as prairie stocks tighten. Year-to-date exports total 2.944 mmt, 15.2% higher than the same period last year while 23.5% above the three-year average. Year-to-date exports of 2.944 mmt are easily on track to meet the 3 mmt export target set by AAFC for 2014/15.

Mustard exports in the month of June totaled 10,195 mt, the lowest volume in five months. Year-to-date exports of mustard seed is 116,074 mt, 91.7% of the volume shipped in the same period last year while a volume equal to the three-year average. It would appear that total exports will fall short of the 130,000 mt export volume total set by AAFC in their July 21 supply and demand data tables.

Canary seed exports in the month of June were reported at 8,940 mt, down 48% from the previous month and the lowest monthly volume reported this crop year. Year-to-date volume totals 156,199 mt, 3.5% ahead of last year and 18.6% above the three-year average. It would appear that 2014/15 volumes will fall short of the 170,000 mt export target set by AAFC in July.

Sunflower exports for the month of June were reported at 2,208 mt, up slightly from the previous month. Year-to-date exports of 29,458 mt are 65.9% of last year's volume and 77.4% of the three-year average, while remaining behind the pace to achieve the 40,000 mt target set by AAFC.

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

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(ES)

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