Canada Markets

Canada's All-Wheat Exports Lag Projections

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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The red bars represent the weekly Canadian all-wheat exports from licensed facilities for 2016/17, while the blue bars represent the 2015/16 shipments, both measured against the primary vertical axis. Cumulative exports as of week 30 are 81.2% of the same week last year (green line) as measured against the secondary vertical axis, while the January AAFC estimates call for current-year exports to reach 96.7% of 2015/16 (purple line). (DTN graphic by Scott R Kemper)

Week 30 exports of wheat and durum bounced back from the weak weather-afffected shipping data released the previous week, with 362,300 metric tons of wheat (94,000 mt) and 118,200 mt of durum (27,600 mt) shipped, with week 29 volumes in brackets. The weekly all-wheat volume of 480,500 mt is also higher than the 436,000 mt shipped in the same week in 2015/16.

The cumulative volume of licensed wheat shipments is 7.6142 million metric tons, down 1.9 mmt or 19.9% from the same period in 2015/16. Cumulative volumes of durum shipped total 2.4326 mmt, 432,000 mt or 15% lower than the same period in 2015/16. As seen on the attached chart, the current pace of exports is well-below current export projections for the 2016/17 crop year when taking into account Agriculture and Agri-Food Canada's export demand estimates.

On the attached graphic, the green line represents cumulative all-wheat exports for the current crop year as a percentage of the 2015/16 crop year data. Current licensed all-wheat exports as of week 30 are 81.2% of the cumulative volume reported in the same week in 2015/16. This percentage has stabilized in the low 80% range over the past six weeks.

The purple line represents the percentage of AAFC's estimate for Canada's all-wheat exports relative to the total volume of all-wheat exports shipped in 2015/16. Recent reductions in AAFC's export estimates show a total of 16.5 mmt of wheat to be exported in 2016/17 along with 4.5 mmt of durum, for a total of 21 mmt. This represents 96.7% of the 2015/16 crop year total.

This gives rise to the spread between the two lines, with estimates suggesting crop year exports will be 96.7% of last year, while actual cumulative data indicates that exports are only 81.2% of last year's pace. This gap is narrowed somewhat by the volume of unlicensed exports as well as the export of flour, whose volumes are included in total crop year volumes, although this will still leave the current pace well behind the projected pace.

Another consideration is the seasonal tendencies that affect shipping. Over the last five years, the cumulative week 30 shipments of wheat averaged 51.7% of the total volume of crop year exports as well as 58% of the total volume of durum shipped over the course of the crop year. Extrapolating these values, 2015/16 exports of wheat would be approximately 14.7 mmt while durum exports would be 4.2 mmt, for a combined volume of 18.9 mmt, well below current estimates.

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

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