Canada Markets

Statistics Canada's Canadian international merchandise trade report shows the country's total exports fell 5.4% to $43.7 billion in February, a disappointing follow-up to the record $46.2 billion reported in January. A quote from CIBC suggests "after a string of stronger-than-expected Canadian data releases, February trade data spoiled the party." After reaching a trade deficit with the world of $628.4 million in January, a six-month low, Canada's trade deficit rose to $1.9 billion in February, a four-month high.

Also disappointing is Canada's overall trade with the U.S. While the U.S. also reported disappointing trade data on Tuesday which showed that country's trade deficit widening from $45.9 to $47.1 billion in February, Canada's trade with the U.S. waned during the month, with our country's trade surplus shrinking from a six-month high in January to $2.678 billion in February, a three-month low.

Statistics Canada's Farm, fishing and intermediate food products group shows total exports at $2.775 billion was up .9% from February 2015 while reaching a two-month high (seasonally adjusted). A narrower classification, the Farm and fishing products group, showed February exports at $2.170 billion, down 4.5% from year-ago data and at a three-month low. The dollar value of wheat exports reached a two-month high while the dollar value of canola exports reached a five-month high. Statistics Canada commentary points to exports of "other food products" falling 10.4% from last month which is largely tied to a drop in lentil exports.

Here's a look at miscellaneous pulse and special crop export data from today's report:

Lentil exports in February totaled 109,092 metric tons, the lowest monthly volume shipped since August. Year-to-date exports total 1.82 million metric tons, 35% higher than the same date last year and 75.6% higher than the three-year average. With cumulative exports now at 75.9% of the current AAFC export target of 2.4 mmt, exports are well-ahead of the pace needed to reach this target given data representing 58% of the crop year.

As seen on the attached chart, monthly activity has fallen sharply from the 526,630 mt shipped in October, with February volume falling below the volume shipped in February 2015 as well as the three-year average. As expected for some time, this year's activity is expected to be a test of overall supplies with current estimates suggesting ending stocks will slide to just 100,000 mt or just 4% of annual demand. The Stocks of principal field crop report, due to be released May 6, will be watched closely, given prices remaining at record highs leaving little or no incentive to store product. Today's Statpub.com price report shows large greens averaging $75.94/cwt delivered to Saskatchewan plants ($41.69) while small red lentils are averaging $44.53/cwt ($33.32), with approximate year-ago prices in brackets.

Dry pea exports in February totaled 150,467 mt, a three-month low and the second-lowest monthly volume moved this crop year. Cumulative crop year exports as of August 1 total 1.823 mmt, down 13.6% from year-ago volumes and 5.7% above the three-year average. Cumulative exports are just above the pace needed to achieve the 3 mmt export target set by AAFC, with 60.8% of the target reached as of February, which represents the first 58% of the crop year.

Chickpea exports for February totaled 14,269 mt, the second highest monthly volume shipped this crop year. Year-to-date, 83,773 mt has been shipped, 172% higher than the volume shipped as of February 2015 while 181% higher than the three-year average. Total exports are estimated at 110,000 mt for the year by AAFC, with year-to-date exports reported at 76.2% of the annual target with data covering 58% of the crop year. The current pace of exports suggests that export volumes will exceed this target and ending stocks will be much tighter than the 50,000 mt that current AAFC estimates would suggest.

Monthly data suggest that 11,384 mt of mustard was shipped in February, the highest monthly volume shipped this crop year. Year-to-date, 68,278 mt has been shipped, 4.4% behind year-ago volumes and 6.3% behind the three-year average. Year-to-date volumes suggest current exports at 56.9% complete, just slightly behind the necessary pace needed to reach the annual export target given that current data represents 58% of the crop year.

A total of 11,935 mt of canary seed was shipped in February, the third-highest monthly volume shipped this crop year. Year-to-date, 87,167 mt has been shipped, 16.2% behind year-ago volumes and just slightly behind the three-year average. Current AAFC estimates suggest that 145,000 mt will be shipped this crop year, with current volumes representing 60.1% of the current target, while just slightly ahead of the pace needed to reach this volume.

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