Canada Markets

Statistics Canada's July Merchandise Report

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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Statistics Canada reported that Canada's merchandise trade with the world moved from a $743 million deficit in June to a $114 million deficit in July, the smallest monthly deficit reported since the last surplus was reported in December 2016. Total exports were reported to reach a record $51.3 billion in July, although month-over-month increases were reported in just five of 11 categories, with the major driver of results an increase in the export of energy products and auto parts.

Headlines are reporting that Canada has posted the largest monthly trade surplus with the United States in almost 10 years, up 15.8% from the same month last year, surely to become a point of discussion in this week's North American Free Trade Agreement negotiations in Washington.

The Farm, fishing and intermediate food products exports were reported at $2.8008 billion in July, the lowest dollar amount reported in three months, although 6% higher than the same month in 2017.

Here is a look at miscellaneous crop data reported for the month of July.

Lentil exports were reported at 121,808 metric tons in July, down from the previous month but the largest July exports reported in four years. Egypt was the largest buyer at 25,000 mt, while India was second at 13,015 mt. After a number of revisions, 2017/18 exports total 1.537 million metric tons, down 37.4% from the previous crop year and 24.2% below the five-year average, while 2.5% higher than AAFC's current 1.5 mmt target set for the 2017/18 crop year. AAFC's latest estimates call for a 1.8 mmt export target for 2018/19.

Dry pea exports were reported at 293,792 mt, up only slightly from last month but likely the largest monthly shipments in July ever achieved. Of this total, 74% was shipped to China, the third straight month that exports exceeded 200,000 mt to this country. After revisions were made, crop year exports total 3.083 mmt, down 21.8% from 2016/17 but 2% higher than the previous five-year average. Total exports exceeded AAFC's 2.9 mmt export target, while the government has pegged 2018/19 exports slightly lower at 2.8 mmt.

Chickpea exports for July drifted to the lowest volume of the crop year in July due to extremely tight stocks, with a reported 1,176 mt exported. This is the lowest volume shipped in the month of July seen while peering over eight years of data, while ending stocks are estimated at an extremely tight 5,000 metric tons. After revisions, it appears that crop year exports totaled 112,920 mt, 7.4% higher than the same period last crop year and 26.6% higher than the five-year average. At the same time, exports are 6% below the 120,000-mt target set by AAFC. Given a significant expansion in acres planted in 2018/19, AAFC has set their export target higher at 135,000 mt.

Mustard exports in July were reported at 6,808 mt, down for the third consecutive month and to the lowest monthly volume shipped this crop year. After revisions, crop year exports total 111,887 mt, down 9.5% from the previous crop year and 9.8% below the five-year average. Crop year exports fell slightly below AAFC's 115,000-mt target, while the 2018/19 target has been set at 125,000 mt.

July canary seen exports were reported at 9,131 mt, up from the previous month while June/July exports were the smallest monthly exports reported this crop year. Crop year exports are calculated at 147,345 mt, down 3.5% from the 2016/17 crop year and the five-year average. Crop year exports are just slightly below the 150,000-mt target set by AAFC, while the target for 2018/19 is set lower at 105,000 mt due to tighter supplies.

Soybean exports are reported at 260,285 mt, down from the previous month but 137% higher than the same month last crop year and likely the largest July shipments ever. For the second straight month, China was the largest buyer, with 53% of the total volume shipped to this country after taking minimal volumes in four of the five previous months. With one month left in the row crop year, cumulative exports total 4.789 mmt, 12.6% higher than the same period in 2016/17 and 30% higher than the five-year average for this period. Exports have already surpassed AAFC's 4.6 mmt target set for 2017/18, while the 2018/19 export target has been set at a record 5.3 mmt.

Corn exports for the month of July are reported at 239,107 mt, down from the previous month while the largest July shipments seen in four years. For the second month, Portugal was the largest buyer, while significant volumes were also shipped to Ireland, the United States and the United Kingdom. With one month to go in the row-crop crop-year, cumulative exports total 1.65 mmt, up 38.4% from the same period last crop year and 27.6% higher than the five-year average. AAFC has increased their crop year target to 1.8 mmt, while the pace of movement should easily be on track to exceed that volume when August shipments become available. AAFC has reported their 2018/19 corn export target lower at 1.5 mmt.

July exports of canola oil are reported down from the previous month at 264,521 mt. Total crop year exports are reported at 3.095 mmt, up .7% from the previous crop year. July exports of canola meal were reported at 405,599 mt, the highest in three months, while crop year exports at 4.532 mmt are down 3% from the previous crop year.

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

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