Canada Markets

Thursday's Statistics Canada releases include updates to the Supply and disposition of grains in Canada (Table 001-0041), as of July 31 in this particular case. For the crops reported, this data reveals positive export data.

Canada's all-wheat exports totaled 24.069 million tons, the fourth consecutive annual increase and the highest volume seen in table results going back to 1996/97 and possibly even a record volume. This volume is 2.4% above 2014 and 26.4% above the five-year average of 19.048 mmt. For some time this column has focused on USDA projections for the 2014/15 crop year, which has indicated that Canada's exports would exceed volumes shipped from the United States to become the second-largest global wheat exporting nation. Indeed, this volume exceeds the current USDA estimate of 23.25 mmt of U.S. exports in 2014/15.

Week 4 CGC statistics for the week ending August 30 indicates cumulative exports from licensed facilities total 1.670 mmt, down 8.4% from the same week last year. Perhaps 2015/16 will lead to yet another tight race between North American suppliers. Last week's cumulative export inspections in the U.S. were 23% lower than the same period last year, which is far below the USDA's estimated 8% increase in annual exports.

Both Canada and the U.S. will face challenges in the upcoming year given the "world is awash with supply", as reported by Bloomberg in its piece Wheat Glut Erodes U.S. Exports as Cheap Russian Grain Wins Buyers. The piece keys on challenges faced due to the 45% devaluation in the Russian ruble in the past year, which makes Russia more competitive in export markets, while key U.S. customers such as Mexico and Nigeria are also facing devalued currencies which make their imports increasingly expensive.

Canada's 2014/15 durum exports are estimated to total 5.369 mmt, 5.9% above 2013/14 and 34.1% above the five-year average of 4 mmt. This volume also reflects the fourth consecutive increase in annual shipments. In data going back to the 1996/97 crop year, this volume marks the highest volume and only the second time that exports exceeded 5 mmt.

The first four weeks of data released by the Canadian Grain Commission suggest durum exports are off to a slow start. Cumulative exports total 94,400 mt, down 83.5% from the 573,100 mt shipped as of the same week in 2014.

Statistics Canada's canola exports represent a record canola export volume of 9.131 mmt, .4% above 2014 and 16% above the five-year average of 7.872 mmt. This is the second consecutive increase in annual shipments as well as the second consecutive year that exports exceeded 9 mmt.

While Statistics Canada's surprise in July 31 stocks of 2.3 mmt could potentially lead to annual supplies over the 16 mmt level which could allow exports and domestic crush to maintain current levels, demand may be the limiting factor, given large supplies of global oilseeds and turbulence in China's market and the currencies of global buyers.

Cumulative canola exports as of week 4 total 637,900 mt, 13.8% ahead of the same week last year, a good start to the crop year (licensed exports only).

Oat exports, estimated at 2.317 mmt in 2014/15, are 3.3% above 2013/14 and 9.1% above the five-year average of 2.124 mmt. This volume is the highest level seen since 2009.

Barley exports for 2014/15 were estimated at 2.522 mmt, the highest volume seen since 2008 and the fourth consecutive annual increase. This volume is 5.5% higher than 2014 and 16.8% higher than the five-year average.

Exports of flaxseed were estimated at 730,700 mt, the highest volume since 2009/2010 and the third consecutive year of increasing volumes exported. This volume is 18.6% higher than 2014 and 37.2% above the five-year average.

Exports of dry peas are close to record territory at 3.0039 mmt, the highest volume shipped since 2010/2011 when a record 3.012 mmt was shipped. This volume is 8% higher than 2013/14 and 18.1% above the five-year average.

Lentil exports were reported at a record 2.229 mmt, up 27.1% from the previous year and a whopping 58.5% above the five-year average. Exports exceeded 1 mmt for the first time only five years ago in 2009/10 while taking only five additional years to surpass the 2 mmt hurdle for the first time.

DTN 360 Poll

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

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