Canada Markets

2013/14 Canola Exports Poised to Set Records?

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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This graphic demonstrates the trend in Canadian canola exports since the 1996/97 crop year. The current record was set in the 2011/12 crop year at 8.7 million metric tons, a level which should be exceeded by the end of this crop year, with a 9 mmt estimate plotted as one possible scenario. (DTN graphic by Nick Scalise)

It is only fitting that a record-sized crop should achieve record exports, although for some time this crop year this appeared as a very remote possibility.

This week's release of the Canadian Grain Commission's Exports of Canadian Grain and Wheat Flour report for the month of May, which reports licensed canola exports for May totaling 1.0178 million metric tons, the first time that exports exceeded one million tonnes since October and only the second time this crop year. Monthly exports have been increasing monthly since February.

As of the end of week 47, which covers the June 23 to June 29 shipping week, the Canadian Grain Commission reported year-to-date exports at 7.949 mmt through licensed facilities. This compares to the 8.5 mmt target set by Agriculture and Agri-Food Canada for the 2013/14 crop year, recently revised upwards, and also compares to the 8.7 mmt exported in the 2011/12 crop year which is the current record for canola exports according to Statistics Canada data. In addition to the 7.9 mmt exported through licensed channels, the CGC has also reported a cumulative volume of 359,766 metric tons of unlicensed exports to the end of April, up 408% from year ago levels.

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With data yet to come from the five final weeks of the crop year, what is the potential for 2013/14 exports and is a new record volume in the cards? Current year-to-date exports are calculated to be 267,000 mt ahead of the cumulative volume required to meet AAFC's 8.5 mmt target. Should weekly shipments continue at the current pace, while unlicensed shipments continue at the average pace of 40,000 mt/month achieving an annual volume of 480,000 mt, annual exports could achieve a 9.25 mmt volume.

Perhaps a conservative methodology would be to utilize the average volume shipped in the week 48 to week 52 shipping weeks over the past three years, using data from the 2010/11, 2011/12 and 2012/13 crop years. This average is 527,333 mt, which includes the weak export data from 2012/13 when canola supplies were extremely tight. When added to the 480,000 mt of expected unlicensed shipments and added to the week 47 cumulative total of 7.9 mmt, we end with 8.9 mmt of exports for the year, close to the 9 mmt plotted on today's graphic for comparative purposes.

Perhaps it's not all good news, with an increase in exports needed to off-set slower than expected pace of canola crush. Current crush is calculated to be roughly 139,000 mt behind the pace needed to meet the AAFC's annual crush target of 7 mmt, recently revised lower. The net effect is that ending stocks should be lower than the 3 mmt target set by AAFC and when combined with lost acres in the eastern Prairies, will make for much tighter supplies in the upcoming crop year which will continue to support prices.

DTN 360 Poll - How many acres have we lost in total due to flooding on the prairies or were not seeded due to excess moisture since the last Canadian Grain Commission acreage report? You can weigh in with your thoughts on this week's DTN 360 poll, found on the lower-right of your DTN Home Page.

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

Follow Cliff Jamieson on Twitter @CliffJamieson

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