Robust wheat exports needed to meet target

Canadian wheat exports must pick up the pace for the rest of the crop to meet Agriculture Canada’s forecast for total crop year exports.

However, canola exports can slow and still meet the shipping target for that commodity.

The domestic canola crush will also likely slow before the end of the year.

The department forecasts wheat exports at 14.6 million tonnes.

Canola exports are expected to be 7.2 million tonnes and the domestic crush 6.5 million.

Subtracting what has moved so far from the total expected movement and dividing by the number of weeks left in the marketing year will determine the average amount that must move each week for the remainder of the year to meet the target.

I found the following by applying this math and using the Canadian Grain Commission weekly export figures to March 17, which is the 33rd week of the crop year:

  • Canada shipped an average of 256,400 tonnes of wheat per week in the first 33 weeks of the year. It must ship 323,100 tonnes per week for the remaining 19 weeks of the crop year to meet the export target.
  • Canola exports averaged 151,500 tonnes a week but can drop to 115,900 tonnes a week for the remaining 19 weeks and still meet the export target.
  • Crush has averaged 136,500 tonnes a week, according to Canadian Oilseed Processors Association figures, but need only be 105,100 tonnes a week for the rest of the year to meet the target.

Another way to look at this is that the price for old crop canola must be high enough to discourage exports and crush.

A story on page three of this week’s paper goes into more detail about the pace of wheat exports.

Canada has exported 8.46 million tonnes of wheat as of March 17, down just 0.4 percent from last year at the same time.

Wheat exports from the United States are even further behind the pace needed to meet its U.S. Department of Agriculture forecast. The USDA has already increased its forecast for year end stocks and might be forced to do so again.

CWB weather and market analyst Bruce Burnett predicted in January that North American wheat exports would pick up in the second half of the year because Russia and Ukraine had run out of exportable product.

However, that shift was slow coming. As March arrived, Canadian weekly wheat exports finally jumped to more than than 300,000 tonnes for two weeks but then fell to 137,000 tonnes.

Agriculture Canada’s forecast for stocks at the end of 2012-13 is four million tonnes, 14 percent lower than the five year average.

Ending stocks could easily rise to five million if wheat sales do not improve in the rest of the crop year.

The CGC weekly report does not capture all exports and Statistics Canada’s grain export figures, while perhaps more accurate, are slow, with the latest numbers available to January.

Based on the those figures, wheat exports might be closer to meeting the Agriculture Canada forecast, but even then exports in the second half of the year must be strong to reach the target.

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