The slow pace of American corn exports was a drag on grain markets last week, but Canadian canola and wheat exports look on target.
I’ll talk about the American export situation later, but let’s first look at the Canadian position.
We have export data from the Canadian Grain Commission’s weekly report for Week 17 to Nov. 21. Seventeen weeks is roughly one-third of the crop year.
We can get an idea of whether exports are booming or lagging by looking at the amount moved so far compared to the forecasted amount of full-year exports in Agriculture Canada’s monthly Outlook for Principal Field Crops.
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The export pace fluctuates through the year and the amount moved at this fairly early point is not necessarily how things will wind up by Week 52, but it is worth looking at.
For canola, export and domestic use numbers look good, given newly released data.
Agriculture Canada’s November report forecasted that in the full year Canada would ship 9.3 million tonnes of canola.
That will likely be lowered in coming reports, considering the Dec. 2 Statistics Canada report that cut the estimated size of the canola crop.
Agriculture Canada’s November export forecast was based on the previous production estimate of 19.1 million tonnes, but the December Statistics Canada report lowered that to 18.2 million tonnes.
But for the time being, let’s stick with the November export forecast.
One third of 9.3 million is 3.07 million tonnes. The CGC report says exports stand at only 2.64 million, or a little more than 400,000 tonnes shy of the one-third mark.
Looking at it another way, given that about 275,000 tonnes of canola are being shipped each week recently, we are about a week and a half behind the pace needed to reach the 9.3 million tonne forecast for full-year exports.
But as I said, with the latest smaller crop estimate, the export forecast will likely be lowered, so the export pace is likely close to where it needs to be.
It is worth noting that canola exports were exceptionally light in the first several weeks of the crop year that started Aug. 1.
Because of the drought-reduced 2021 crop, bins were already empty in August and new supply was not available until harvest was underway in September.
It is also important to look at domestic canola consumption.
Agriculture Canada’s November report forecasted food and industrial use at 10 million tonnes.
One-third of that would be 3.3 million tonnes and the CGC weekly report pegged domestic disappearance at 3.167 million. That is close to the target and good when considering the latest cut in the estimated size of the crop.
Turning to wheat, Canada’s export pace to date looks robust.
This time the new Statistics Canada report will likely have little impact on Agriculture Canada’s export forecast. The production number for wheat, excluding durum, is 28.38 million tonnes, little changed from the previous estimate of 28.58 so Agriculture Canada’s export forecast of 18.3 million tonnes should stand.
One-third of that is about six million tonnes and to the end of Week 17 exports stood at 6.4 million tonnes, so it appears the shipment pace is on track to meet the target.
Statistics Canada made a major reduction to the size of the durum crop, cutting it to 5.44 million tonnes from 6.12 million.
With that in mind, the 1.47 million tonnes of durum exports to date looks healthy.
This Canadian export story stands in sharp contrast to the situation in the United States.
To Nov. 24, the U.S. had total corn outstanding export sales of 12.58 million tonnes, only about half the amount outstanding at the same point last year.
Actual exports stood at 5.77 million tonnes, down 40 percent from the same point last year.
Sales to China account for most of the shortfall.
Last year at this point, China had outstanding purchases of 10.74 million tonnes. This year that number is only 1.79 million tonnes.
China is expected have less need for imported corn this year. Also, it has bought more from Brazil now that it has met phytosanitary requirements.
Other top customers, including Japan and Canada, are also buying less American. corn.
The strong U.S. buck is an impediment to sales and the low water level on the Mississippi River is making it hard to get grain to export position.
The U.S. Department of Agriculture already expects reduced corn exports this year, at 54.61 million tonnes compared to 62.78 million last year. And the current forecast was a downgrade from 57.79 million the month before.
If the current slow pace of exports continues, the USDA might be forced to continue lowering its forecast in coming months.
