Canada Markets

Official Chinese import data for the month of September showed imports of Canadian soybeans at 3,007 metric tons, not a large tonnage but encouraging when considering this was reported to be 277.87% above September 2014. Also of interest is that China's total soybean imports for the month were 44.27% above last year, so the year/year growth in imports from Canada exceeded the overall growth in imports as well as the year/year increase reported for any other country.

While Canada's soybean acreage is estimated by Statistics Canada to have dipped in 2015 for the first time in a 10-year period to 5.420 million acres, Manitoba acreage has increased for eight consecutive years to a record 1.330 million acres while Saskatchewan's third year of estimates shows a further 300,000 acres planted this spring.

Week 12 shows movement well ahead of last year's pace, which resulted in a record 3.802 million metric tons of exports. Canadian Grain Commission data reports that prairie producers have delivered 254,000 metric tons as of Week 12, or Oct. 25, up 147% from the same period in 2014/15. Total terminal receipts are reported at 1.631 million metric tons since Aug. 1, up 103% from last year's volume for the same period. As well, total exports are reported at 697,600 mt, 56% higher than the same period last year.

The attached chart shows licensed terminal exports only as of week 12, while highlighting the growing focus on west coast shipments for Asian markets (blue bars). As of week 12, licensed exports from west coast ports made up 20% of the total volume shipped (licensed facilities only), which is up from 16.2% in 2014/15 and 9.7% in 2013/14.

Friday's close shows the National Average Soybean Basis at 55 cents under the January future, while DTN charts show this U.S. basis tracking closely to its five-year average. Current North Dakota bids close to the Canadian border range from $7.77/bu to $7.98/bu USD. Canadian producers continue to benefit from the weaker Canadian dollar exchange rate, with a small sample of Manitoba bids reported between $9.79 to $9.95/bu or $359.72/bu to $365.60/mt.

Commercial buying interest continues to be the saving grace in the soybean market. Despite this interest, Monday's January future closed 7 cents lower while closing barely below support at $8.79/bu while ending Monday's session with a bearish outside trading bar. At the same time, stochastic momentum indicators on the daily chart are in oversold territory, which may act to slow the selling. All eyes will remain on Brazil, with some estimates indicating the possibility of a record 100 mmt crop this year but first thing is first and planting is well behind average pace.

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

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(ES)

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