Canada Markets

A Look at what is Moving at Primary Elevators

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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This chart highlights the cumulative shipments from primary elevators as of week 20 (blue bars) compared to 2017-18 (brown bars) and the five-year average (grey bars). Movement of wheat is noticeably higher than recent years, while movement of oats, barley and lentils also remain ahead of the previous crop year and five-year average pace. (DTN graphic by Cliff Jamieson)

As of week 20, or the week ending Dec. 16, primary elevators shipped 19.7374 million metric tons of all grains, up 7.4% from the same period in 2017-18 and 12.4% higher than the five-year average for this week.

Railways continue to do perform well ahead of the challenging winter season, with week 20 data from the Ag Transport Coalition showing that the two major railways supplied 88% of the hopper cars wanted for loading in the country, up from 80% the week prior.

The most recent Weekly Performance Update report from the coalition shows total outstanding orders as of week 20 at 1,077 cars, while railway cancelations or rationed cars totals 2,118 cars, which compares to 875 outstanding orders for this same week in 2017-18 and an additional 10,574 cars that were cancelled or rationed by the railways.

When considering shipments by crop, as seen on the attached chart, the most noticeable trends are the year-over-year increase in wheat shipments of 16.8% or 1.168 million metric tons and the year-over-year decline in canola movement of 7.5% or 374,200 metric tons. This change in shipments remains closely tied to changes in the pace of exports and contributed to this month's anticipated increase in 2018-19 wheat exports by AAFC of 500,000 mt and corresponding drop in their export forecast for canola by 500,000 mt. Further revisions could take place in upcoming months moving each forecast in a similar direction.

The cumulative trends shown could very well continue. In week 20, 500,600 mt of wheat were shipped from primary elevators, up 71.4% from the same week in 2017-18. Shipments of canola were reported at 223,700 mt, down 35.6% from the same week in 2017-18. Overall movement of grain was reported at 1.078 mmt, up 14.6% from the same week last crop year.

Of the selected crops shown, other crops which have seen a year-over-year increase in movement are oats (13.7%), barley (21.2%), peas (13.8%) and lentils (58.6%), with the year-over-year change in brackets. Crops that are lagging in relation to last year's movement in the first 20 weeks includes durum (5.9%), flax (24.3%) and soybeans (12.6%).

When one considers movement by province (not shown), Saskatchewan has been the major beneficiary of the increased pace of movement, with 53.4% of the total movement origin from this province, with the total volume up 19.9% from the same week in 2017-18. Manitoba movement is 1.7% higher than last year while shipments from Alberta are 9.5% behind the year-ago volume. This could be partially tied to Alberta's late harvest or even a deliberate strategy by the railroads to create faster turnaround from Alberta in the winter months ahead.

It is interesting to note that while Saskatchewan has shipped 42% more wheat than the same period in 2017/18, even the movement of canola is 4% higher than the same week in 2017-18 crop year. The year-over-year drop in cumulative canola volume moved is directly attributable to a drop in movement from both Manitoba and Alberta.

When one looks at prairie stocks of grain, total stocks reported as of week 20 are reported at 3.9714 mmt, which represent 79.6% of the estimated working capacity on the Prairies, which could be viewed as fair overall. This varies from stocks in Alberta that account for 82.5% of estimated working capacity, Saskatchewan at 80.4% of working capacity and Manitoba at 74% of working capacity.

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

Followhim on Twitter @CliffJamieson

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