Canadian farmers are delivering more canola than wheat to elevators.
I believe that has never happened before.
Wheat markets in Canada are struggling this year because of poor quality, which helps explain why wheat deliveries are at only 9.04 million tonnes while canola is posting a new record high at 10.96 million.
But canola deliveries are also higher than what wheat deliveries were last year at this time, 10.3 million.
Canola continues to post record numbers bolstering the argument that it is now the dominant crop in Western Canada.
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China’s grain imports have slumped big-time
China purchased just over 20 million tonnes of wheat, corn, barley and sorghum last year, that is well below the 60 million tonnes purchased in 2021-22.
The delivery statistics, from the Canadian Grain Commission, are driven by the record smashing pace of exports and domestic crush.
I’ve sounded like a broken record on this topic but the numbers are remarkable.
Total canola disappearance, exports and domestic use, is running 1.1 million tonnes ahead of 2015-16 at this point and 2.64 million tonnes ahead of 2014-15.
Canola exports to the end of week 27, Feb. 5, stand at 5.58 million tonnes, up 10 percent or 519,000 tonnes over last year at the same time.
And this is after a slow start to the crop year when shipments to China were delayed over the blackleg dockage issue.
Canola crush to Feb. 8 is 4.88 million tonnes, 612,000 tonnes or 14.3 percent ahead of last year.
Unless there is a lot of canola hidden somewhere that we don’t know about, stocks of the oilseed by the end of the crop year will likely be significantly smaller than the two million tonnes forecast by Agriculture Canada.
It is a similar situation in the United States where soybean exports are running ahead of the pace needed to hit the U.S. Department of Agriculture’s export target.
The USDA disappointed the market last week when it did not increase its export forecast and decrease its year-end stocks forecast.
The department expects American soybean exports will fade in the second half of the crop year as competition from South America heats up.
But some analysts note the Brazilian currency is rallying against the American dollar, making its soybeans less competitive than they were last fall, so American soybeans might not be as seriously disadvantaged as the USDA expects.
The export picture for oilseeds is also buoyed by signs that China’s economy is picking up steam.
Its imports of all commodities in January were at a near record pace, defying expectations.
Soybean imports hit 7.66 million tonnes in January, the most for the month since at least 2010.
Some economists believe China’s economy is stabilizing but others think the government stimulus measures that Beijing employed last year to perk up lagging growth have run their course and the country could be in for slower growth in 2017.
At least the U.S.-China tensions that grew since U.S. president Donald Trump was elected cooled somewhat last week.
Trump and China’s leader Xi Jinping spoke by phone Feb. 9 and Trump calmed the waters by promising to respect Bejing’s One China policy, that there is only one China and Taiwan is part of it.
Trump angered Bejing in December when he talked with the president of Taiwan, leaving the im-pression that he might change America’s attitude toward the island nation.
