After moving at a furious pace for months, West Coast crop exports might slow a little in the final third of the crop year as old-crop supply dwindles.
The line-up of ships at Vancouver fell to only 15 in week 34 to March 30, down from around 30 in weeks 25 to 30. Last year in the same week there were 30 ships in port, according to the weekly Quorum Grain Monitoring Program report. There were six ships at Prince Rupert, down one or two from recent weeks.
Vancouver rarely sees only 15 grain ships in port these days and if the scarcity continues it would be concerning, but it was reassuring to see that the same report showed 22 ships inbound to the port.
That is large compared to recent weeks and it might bring the total in port back up to a more comforting level.
Another reassuring statistic is that the amount of all crops arriving by rail at port in each of weeks 30 to 34 has been more than 900,000 tonnes.
That is not quite as large as in January when terminal receipts were topping one million tonnes a week to feed the extremely hot export pace.
But the recent pace is also significantly better than in February, when exceptionally cold weather pushed receipts down below 800,000 tonnes weekly, with the worst performance in week 28 when only 525,000 tonnes arrived.
A slightly slower export pace from here on, however, would not be surprising given that exports of most crops to this point are ahead of last year’s pace and year end stocks of some crops will likely be unusually tight.
For example, week 34 is 65 percent of the way though the crop year but canola exports are already at 72.4 percent of the expected final total.
In the remaining 18 weeks of the crop year, canola exports need average only about 170,000 tonnes per week to get to the expected full-year total of 10.9 million tonnes.
In the four weeks to March 30, they averaged 224,325 tonnes per week, according to Canadian Grain Commission figures.
If they average much more than 170,000 tonnes weekly from here on, we’d run out of canola.
Agriculture Canada forecasts that year end canola stocks will be an unusually tight 700,000 tonnes, based on an expectation of 10.9 million tonnes of exports and 10.35 million tonnes of domestic use.
Durum and barley exports are also easily on pace to meet the expected year end export total that Agriculture Canada forecasts.
However, non-durum wheat exports will have to pick up the pace. Wheat exports at 12.92 million tonnes are well ahead of last year at the same time, but they stand at only 61 percent of the expected final total of 21.1 million tonnes.
But with Thunder Bay port resuming operations now that ice has cleared, wheat exports from the East Coast could pick up soon and that could help to propel the total wheat pace.
Last year’s crop export story was notable for the strong showing in the final months of the crop year.
When COVID-19 hit the world in February and March it caused many supply chain disruptions and worries rose that crop export targets would not be met.
However demand, particularly from China, began to quietly ramp up leading to better than expected movement late in Canada’s crop year. It continued to grow into the new crop year, eventually helping to spark the price rally enjoyed through the winter.
There are persuasive arguments that crop demand will continue strong into 2021-22 as the COVID-19 vaccines roll out around the world and we finally start to control the disease, allowing life to return to a more normal state. Economies should rebound, helped by government stimulus spending and continued low interest rates.
Recent high crop prices are designed in part to encourage production of big crops this summer to refill global stocks and meet the expected strong demand.
But that expectation was shaken by the smaller than expected acreage increases for corn and soybeans in the United States Department of Agriculture’s prospective planting report March 29.
Many analysts and traders expect fence-row to fence-row seeding, and believe the USDA report is over cautious.
Farmers told the USDA they’d plant 91.144 million acres of corn, up less than one percent from last year. The trade, on average, expected 93.2 million.
Soybean area in the report is 87.6 million acres, up five percent. The trade, on average, expected almost 90 million.
Wheat area was 46.36 million acres, up five percent. The trade, on average, expected 45 million.
However, the wheat increase is entirely attributable to more winter wheat acres.
Spring wheat at 11.7 million acres is down four percent and durum area at 1.54 million is down nine percent.