Canada Markets

Projected 2018-19 Exports Based on Historic Pace of Movement

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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The blue bars represent a projected level of 2018-19 exports based on the historic pace of movement over the first half of the crop year, while the orange bars represent AAFC's most recent forecasts and the grey bars represent 2017-18 exports. (DTN graphic by Cliff Jamieson)

Week 26 Canadian Grain Commission grain handling statistics, representing shipments through the week ended Jan. 27 or the first half of the crop year, show total licensed exports up 2.033 mmt or 9.4% from the same period in 2017-18 for all major grains. Exports have increased with movement of nine of the 15 crops reported ahead of the same period in the previous crop year.

While the year-over-year export of barley is 311,500 metric tons higher than 2017-18 through licensed facilities, the movement of soybeans is 365,100 mt higher, and the movement of corn is 425,400 mt higher, the lion's share of the year-over-year change is for wheat, which is up 1.381 million metric tons or 17.5% to 9.253 million metric tons, also 19.5% higher than its five-year average for this period.

The largest year-over-year decline is in the movement of canola, which is down 401,600 mt or 7.4%, while the movement of durum follows, down 145,100 mt or 7.8%.

As seen on the attached chart, the blue bars represent crop year exports based on the five-year average pace of movement over the first 26 weeks or first half of the crop year (week 26 licensed exports as a percentage of the crop year's total exports), which takes into account the seasonality factors that affect grain flow. These projections are then compared to the current January Agriculture and Agri-Food Canada (AAFC) forecasts (orange bars) and the grey bars that indicate total exports for 2017-18.

This analysis may point to instances where the current pace of exports exceeds the potential as seen in AAFC forecasts and vice versa.

Of the selected crops, exports of wheat, oats and barley have the potential to exceed current government projections as well as the total volume exported in 2017-18. Showing the most potential relative to AAFC's forecast as well as 2017-18 are wheat exports. Over the past five years, licensed exports of wheat as of week 26 represented an average of 44.3% of total crop year exports. This average pace would project to crop year exports of 20.9 mmt, which compares to the current AAFC forecast of 18.7 mmt and total exports in 2017-18 of close to 17.5 mmt. Of course, the limiting factor may be supplies, while Feb. 5 Statistics Canada's Dec. 31 stocks report may provide insight into the level of stocks and the year-to-date disappearance into the feed market.

As has been noted in past weeks, the pace of movement for both oats and barley leads to a crop year export projection that is well above current government estimates and the 2017-18 volumes, while supplies will be the limiting factor and will leave projections out of reach. The point made is that the current pace of movement could lead to an upward revision in current government estimates.

Projections for both canola and soybean exports are tightly grouped with current AAFC estimates and year-ago estimates, although the potential remains that current estimates may be trimmed slightly.

Relative to last year, the weakest data is for durum. Over the past five years, an average of 47.1% of total crop year exports were realized as of week 26 licensed volumes. This average pace projects forward to crop-year exports of 3.6 mmt, as opposed to the most recently released AAFC forecast of 4.2 mmt.

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

Follow Cliff Jamieson on Twitter @Cliff Jamieson

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