GRAINS COUNCIL RAISES WORLD FORECASTS
The IGC in its monthly grain report today raised the estimate for 2015-16 wheat production by 10 million tonnes from last month to 715 million and consumption by 4 million to 715, which will equal production. Projected wheat trade was down by 2 million from last month at 149 million. Global wheat carryover at the end of 2015-16 is expected to remain unchanged from the prior year at 200 million tonnes, 6 million more than expected last month. Coarse grain production was estimated at 1.253 billion tonnes, compared to 1.242 last month and 1.290 last year, with use at 1.266 billion vs 1.259 in April and carryover of 226 million vs 221 million last month.
SASKATCHEWAN SEEDING IN THE HOME STRETCH
Seeding in Saskatchewan advanced to 87% complete as of May 25 vs the 5-year average of 61%. Moisture conditions deteriorated to only 62% having surplus or adequate topsoil moisture province-wide. Moisture was considered adequate across 91% of the southeast, 48% in the southwest, 38% in west central, 40% in northwest, 74% in east central and 71% in the northeast. Emergence has been slow in dry areas, with some of the advantage of early seeding being lost.
FIRST-QUARTER FARM CASH INCOME IS RECORD-HIGH
Statistics Canada said farm cash receipts for the first quarter of 2015 showed a 4.5% increase over 2014 quarter despite lower crop and hog prices, to a new first-quarter record of $14.83 billion vs $14.20 billion a year earlier. Even more notably, all of the increase was in the western provinces, where cash income increased 7% to a record for the period of $10.04 billion. Cash receipts declined 1.5% in eastern Canada. The west also had a record 68% of national farm cash income. Higher livestock receipts accounted for the entire gain, up 8% to $6.32 billion. Cash revenue from crops was virtually unchanged at $7.93 billion. Cash revenue from sales of cattle and calves increased 25.5% to $2.65 billion, as average prices increased 45%, while marketings were the lowest for the quarter since 1994. For the first time since 2003, revenue from cattle sales exceeded the total of the supply-managed dairy and poultry sectors. Cash receipts from hogs fell 12% to $1.03 billion because of a 16% decline in average prices.
CONDITIONS ARE DRY ON THE WESTERN PRAIRIES
Lack of rain and drying topsoil is fast becoming a concern in Alberta and western Saskatchewan, while Manitoba and eastern Saskatchewan are still very wet from the recent storm. Most of the west half received less than 40% of normal rain since the spring thaw and southwest Saskatchewan and southern and central Alberta have had virtually none in several weeks. Some farmers have stopped seeding remaining canola because of insufficient moisture for germination. Little or no rain is forecast for the entire region over the next 10 days with temperatures above normal in the mid to high 20s. However crop stress may not be reflected in futures values unless similar conditions develop in the northern states.
USDA SAYS CORN PLANTING AT 85%, SOYBEANS 45%
In its weekly crop progress report for the week ended May 17, USDA reported spring wheat planted at 94% (week earlier 87%, average 65%, year ago 47%):spring wheat emerged, 67% (54%, 38%, 22%); winter wheat headed, 68% (56%, 56%, 55%); soybeans planted, 45% (31%, 36%, 31%); soybeans emerged, 13% (0%, 12%, 8%); corn planted, 85% (75%, 75%, 71%); corn emerged, 56% (29%, 40%, 32%);
WTO AGAIN RULES AGAINST US COOL MEAT LABEL LAW
The World Trade Organization's dispute settlement body, as widely expected, ruled for a fourth (and for now the final) time that the US country of original labelling (COOL) legislation is WTO-illegal. This was the final possible appeal, to a process that started in 2008. The panel said that the original decision rendered in 2009 was correct, as were the conclusions of the first appeal, after the US government revised COOL regulations. The revisions were meant to address the WTO objection that domestic and imported livestock was treated differently by applying the same labelling requirements to domestically produced meat, which made compliance even more onerous for American packers. The next step is up to the US administration and Congress. If the law is not repealed or the offending parts removed, Canada and Mexico can proceed with retaliation in the form of duties against American imports, subject to WTO permission.
ALBERTA SEEDING ADVANCES
Alberta Agriculture's latest weekly crop report said seeding was near 50% done vs 10% year-ago and 22% average as of May 14. Seeding was being delayed in central districts because of topsoil dryness. Overnight lows were cold with scattered frost reported. Topsoil moisture was reported 57% good or excellent vs 69% in the prior week. Spring wheat is 59% seeded, barley 43%, canola 35%.
CANOLA CRUSH LAGS
Weekly canola crush was under 130,000 tonnes for the 3rd week, COPA reported. Crush in the week ended May 13 was 127,333 tonnes vs 102,361 and 126,917 in the prior weeks. The 4-week average is 126,880 and average for the crop year to date is approx 145,000 tonnes. Capacity use was 69.7% vs 54.6 in the prior week and 81.4% in '14-15 to date. Crop-year-to-date crush is 5.622 mmt vs 5.416 year-ago, up 4%.
RUSSIAN WHEAT EXPORT TAX LIFTED
Russia announced that it has lifted a wheat export duty imposed in March, effective immediately. The duty was scheduled to apply until June 30 at a minimum of 35 euros per tonne. Russian exports in 2014-15 to date are 20.0 mmt and may reach 21.9 before the crop year ends June 30.
THREE IMPORTERS TAKE NEARLY ALL CANOLA
Canadian exports by destination for the crop year to Mar 31, 000 tonnes (year-earlier): Non-durum wheat: Japan 831 (917); Colombia 749 (531); USA 732 (1,306); Mexico 660 (836); Nigeria 550 (298). Durum wheat: Italy 1,095 (554); Algeria 686 (249); Morocco 425 (550); Venezuela 178 (270). Oats: USA 729 (583). Barley: China 537 (302); Japan 176 (206); USA 149 (147). Flax: China 138 (73); Belgium 80 (61); USA 54 (68). Canola: China 2,377 (2,287); Japan 1,494 (1,333); Mexico 927 (813); UAE 268 (204); USA 262 (371). Peas: India 896 (533); China 401 (499); Bangladesh 267 (129). Soybeans: China 7882 (895); Netherlands 320 (578); France 172 (0); Germany 158 (159); Italy 121 (132).
NO DECLINE SEEN ON WORLD CEREAL SURPLUS
The US agriuculture department projected world wheat production for 2015-16 at 718.9 million tonnes, the second-highest on record after 2014-15, exceeding projected use of 716.6 million. The year-to-year increase in world demand is barely a million tonnes. World wheat carryover was projected at 203.3 million tonnes, up from 201.0 a year earlier and 190.0 two years earlier. World coarse grain production was put at 1.277 billion tonnes and use at 1.281 billion; a production decrease of 8 million tonnes is met by a demand to increase of 13 million, but because of larger carry-in season-end carryover will drop just 4 million tonnes and will be the second-highest in history.
NO ACTION ON BILL C-48
Bill C-48, which would make important reforms to the operations of the Canadian Grain Commission, has not progressed past first reading since its introduction in December and now will not pass before parliament is dissolved for the October election. The bill would replace the present expensive and not completely effective system of bonding of grain buyers to secure producer payments. An industry-financed fund would be created to which all buyers would contribute according to their size and risk profile and from which farmers would be compensated if a grain buyer fails financially. Feed mills which buy grain from producers would be licensed for the first time, the Grain Commission would get expanded authority to apply administrative penalties for infractions of the Act, farmers would get better access to binding grade determinations in case of disagreement and the first steps would be taken to extend Commission regulation to the eastern Canadian grain trade.
US CORN, WHEAT EXPORTS FALL BEHIND
US wheat and corn export clearances are falling further behind year-ago rates as well as the agriculture department's 2014-15 projections. To May 11 cumulative wheat shipments for the marketing year to date were 21.45 million tonnes, down 28% from 29.63 at the same point in 2014-15 and corn at 28.80 million vs 30.46. Soybean shipments of 46.24 million tonnes were 11% ahead of 41.69 million a year ago. USDA expects wheat exports to be down 27%, corn down 5% and soybeans up 9% for the year
TRACTOR SALES HOLD UP
Canadian farm tractor sales (above 40 hp) during April were 1,153 units, almost unchanged from the year-ago month, when 1,187 were delivered. Sales of large four-wheel-drive models were 162 vs 159. For the first four months of 2015 tractor sales were down 8% to 3,592 from 3,901. Harvester combine sales were 81 during April and 331 in the year to date compared to 110 and 523, a 37% drop, according to the Association of Equipment Manufacturers. US sales of tractors in farm sizes were 8,869 for the month and 27,680 for the year, down 5% and 9% respectively. US combine sales were 583 and 1,588, down 34% and 42%.
FREE TRADE WTH PHILIPPENES?
The Canadian government is holding preliminary talks with the Philippines on a possible free trade agreement, following the recent visit to Ottawa by its president. Canadian exports to the country are currently $600 million a year of which about 27% consists of food and agricultural products; imports are valued at $1.25 billion, primarily manufactured goods. The Philippines is a member of the ASEAN trade group of high-growth Asian countries which includes Indonesia, which is not a member of the TPP group.