VANCOUVER SHIPINVEST Canadian Grain Overview Casey McCawley - - PowerPoint PPT Presentation

Canadian Grain Overview

Casey McCawley October 2019 Vancouver, BC

VANCOUVER SHIPINVEST

The State of Agricultural trade in the world today

Canadian Grain Overview

• A. Macro Overview
• B. Prairie Crop Production

Macro Overview

MAJOR DEMAND FACTOR

• Asian Swine Flue
• On going trade war between US and China impacting

global trade patterns. Impact on soybean market is significant with stocks piling up in the US

• Reduced Ethanol Inclusion.

MAJOR DEMAND FACTOR: Canadian Focus

• Chinese Canola Restrictions
• Indian Pea Tariffs
• Italy: Country of Origin pasta labelling requirements
• Vietnam: Zero tolerance for thistle in Canadian wheat

to Vietnam

World Wheat Stocks

2019/20 Global Wheat Ending Stocks equal to 139 Days of Demand4 source: OCTOBER 2019( WASDE (USDA) and USDA PSD Online database

1 Algeria, Egypt, Libya, Morocco, and Tunisia. 2 Indonesia, Malaysia, Philippines, Thailand, and Vietnam. 3 Lebanon, Iraq, Iran, Israel, Jordan, Kuwait, Saudi Arabia, Yemen, United Arab Emirates, and Oman. 4 domestic consumption plus exports for export regions and domestic demand for all other regions

Canada

58 days

U.S.

180 days

Brazil

36 days

Argentina

32 days

Australia

104 days

Russia

38 days

Kazakhstan

49 days

China

411 days

India

77 days

E.U.

28 days

North Africa1

108 days

Ukraine

18 days

S.E. Asia2

70 days

MidEast3

104 days

Pakistan

days

including China

excluding China

Wheat Ending Stocks

HRW HRS SRW white durum 208 198 138 110 158

Japan

56 days

Nigeria

14 days

9 6 9 7 7 9 6 6 6 7 8 8 7 8 2 8 8 9 7 8 7 1 8 5 8 4 6 7 6 4 8 5 1 9 4 9 2 8 1 8 3 9 9 1 8 7 8 8 8 2 8 3 1 9 9 3 1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 2 1 2 2 2 3 2 4 2 5 2 6 2 7 2 8 2 9 2 1 2 1 1 2 1 2 2 1 3 2 1 4 2 1 5 2 1 6 2 1 7 2 1 8 2 1 9 2 2

World Soybeans Stocks

2019/20 Global soybean Ending Stocks equal to 99 Days of Demand1 source: OCTOBER 2019 WASDE (USDA) and USDA PSD Online database

1 Indonesia, Malaysia, Philippines, Thailand, and Vietnam. 2 domestic consumption plus exports for export regions and domestic demand for all other regions

China

MMT

U.S. 42days Brazil 166 days Argentina 166 days China 68 days E.U. 22 days 49 days Mexico 49 days including China

Soybean Ending Stocks

Paraquay 86 days

68 57 68 51 42 68 66 69 73 74 86 78 89 94 105 87 75 96 106 81 81 84 95 93 106 107 116 99 1 9 9 3 1 9 9 5 1 9 9 7 1 9 9 9 2 0 0 1 2 0 0 3 2 0 0 5 2 0 0 7 2 0 0 9 2 0 1 1 2 0 1 3 2 0 1 5 2 0 1 7 2 0 1 9

S.E. Asia1

World Corn Stocks

2019/20 Global Corn Ending Stocks equal to 98 Days of Demand2 source: OCTOBER 2019 WASDE (USDA) and USDA PSD Online database

1 Indonesia, Malaysia, Philippines, Thailand, and Vietnam. 2 domestic consumption plus exports for export regions and domestic demand for all other regions

China

MMT

U.S. 50 days Brazil 30 days Argentina 42days China

258 days

E.U. 38 days Japan 33 days Mexico 24 days

1 1 7 9 3 1 4 9 1 1 9 1 6 1 2 1 1 8 1 5 8 9 7 4 5 9 6 9 6 4 5 5 5 9 6 3 5 8 4 9 5 1 6 8 2 1 5 1 1 4 1 2 1 1 1 3 1 4 9 8 1 9 9 3 1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 2 1 2 2 2 3 2 4 2 5 2 6 2 7 2 8 2 9 2 1 2 1 1 2 1 2 2 1 3 2 1 4 2 1 5 2 1 6 2 1 7 2 1 8 2 1 9 2 2 including China

excluding China

Corn Ending Stocks

South Africa 60 days Canada 57 days S.E. Asia1 24 days Ukraine 8 days Egypt 44 days South Korea 64 days

Prairie Crop Production

Overall Strong Yields

Map shows variance from the 5 year avg for the five highest weekly NDVI readings source: Statistics Canada and Parrish & Heimbecker Limited

10% 33% 55% 78% 100%

NDVI above 5 year average NDVI below 5 year average

75 km radius

0.000 0.100 0.200 0.300 0.400 0.500 0.600 0.700

C R O P 1 5 C R O P 1 6 C R O P 1 7 C R O P 1 8 C R O P 1 9 C R O P 2 C R O P 2 1 C R O P 2 2 C R O P 2 3 C R O P 2 4 C R O P 2 5 C R O P 2 6 C R O P 2 7 C R O P 2 8 C R O P 2 9 C R O P 3 C R O P 3 1 C R O P 3 2 C R O P 3 3 C R O P 3 4 C R O P 3 5 C R O P 3 6 C R O P 3 7 C R O P 3 8 C R O P 3 9 C R O P 4 C R O P 4 1

current crop year 5 year avg +/- 1 st. dev. Overall PrairieRegion Average

scale

Prairie Grain Production

Million tonnes source: Statistics Canada and Parrish & Heimbecker Limited

Prairie Provinces Crop Production

million tonnes

7 5 4 7 8 9 9 10 13 13 13 14 14 18 16 18 19 21 20 18

41 31 23 35 38 38 35 33 41 37 30 33 35 48 37 37 41 39 41 42 10 20 30 40 50 60 70 80 90 2 2 1 2 2 2 3 2 4 2 5 2 6 2 7 2 8 2 9 2 1 2 1 1 2 1 2 2 1 3 2 1 4 2 1 5 2 1 6 2 1 7 2 1 8 2 1 9 F

Canola Cereal Grains1 Pulse Crops2 Soybeans

• ther Field Crops

1 includes all wheat, barley, oats, fall rye, canaryseed, triticale and mixed grains 2 includes all dry peas, lentils, chickpeas and fababeans

1 8 4 9 1 3 7 3 5 2 3 2 7 1 9 3 5 2 9 4 0 2 5 3 0 3 6 3 7 5 4 5 1 1 4 9 1 3 2 3 3 3 2 4 1 8 1 3 1 3 1 0 1 0 4 6 3 5 3 5 5 0 6 0 6 5 2 5 1 1 2 4 0 0

Alberta Saskatchewan Manitoba Western Canada

• verall

canola spring wheat

Harvest Progress Part 1

Map shows Regional Harvest progress source: Provincial Agricultural Ministries and Parrish & Heimbecker Limited

Limited harvest progress before mid September weather challenges resulting in limited supply of high quality durum and spring wheat. Mid September Avg: 50%

3 5 7 9 2 4 1 8 1 9 1 6 4 7 4 6 3 3 5 4 5 1 4 8 4 4 6 3 7 0 7 2 8 2 7 6 2 5 2 8 4 3 4 6 5 7 4 4 5 4 4 5 5 3 3 4 3 3 6 7 7 0 5 8 7 3 7 0 6 5 4 7 2 8 4 9 0 0

Alberta Saskatchewan Manitoba Western Canada

• verall

canola spring wheat

Harvest Progress Part 2

Map shows Regional Harvest progress source: Provincial Agricultural Ministries and Parrish & Heimbecker Limited

Need good October harvest weather to complete 2019

• harvest. Quality issues

have already occurred specifically on cereals grains End of September Avg: 75% End of October Avg: 95%+

P r o j e c t e d G r o s s M a r g i n ( d o l l a r s p e r a c r e ) o f S e l e c t e d C r o p s

r a n g e is + / - 1 0 % o f b a s e y ie ld a n d / o r p r ic e $ 0 $ 2 5 $ 5 0 $ 7 5 $ 1 0 0 $ 1 2 5 $ 1 5 0 $ 1 7 5 $ 2 0 0 f e e d w h e a t r e d l e n t ils f e e d b a r l e y 2 C W R S 1 2 . 5 1 C P S R 1 1 . 5 p e a s ( y e ll o w ) 1 C W R S 1 3 . 5

• a t s

s o y b e a n s c a n o l a 1 C W A D 1 3 . 0

f i x e d c o s t s

2019 Crop Margins

source: Parrish & Heimbecker Limited

#1 Durum & Canola Feed Wheat & Lentils

M a j o r A s s u m p t i o n s

1 C W R S 1 3 . 5 : 4 5 . 0 b u / a c @ $ 5 . 9 5 / b u ; $ 1 7 5 o p e r a t in g c o s t p e r a c r e 2 C W R S 1 2 . 5 : 4 5 . 0 b u / a c @ $ 5 . 7 0 / b u ; $ 1 7 5 o p e r a t in g c o s t p e r a c r e 1 C P S R 1 1 . 5 : 5 5 . 0 b u / a c @ $ 4 . 8 0 / b u ; $ 1 8 0 o p e r a t in g c o s t p e r a c r e 1 C W A D 1 3 . 0 : 4 5 . 0 b u / a c @ $ 7 . 5 0 / b u ; $ 1 8 5 o p e r a t in g c o s t p e r a c r e f e e d w h e a t : 4 5 . 0 b u / a c @ $ 4 . 5 0 / b u ; $ 1 8 5 o p e r a t in g c o s t p e r a c r e

• a t s : 9 0 . 0 b u / a c @ $ 2 . 8 5 / b u ; $ 1 5 0 o p e r a t in g c o s t p e r a c r e

f e e d b a r le y : 7 0 . 0 b u / a c @ $ 3 . 2 5 / b u ; $ 1 5 5 o p e r a t in g c o s t p e r a c r e c a n o la : 3 7 . 5 b u / a c @ $ 9 . 7 0 / b u ; $ 2 4 0 o p e r a t in g c o s t p e r a c r e r e d le n t ils : 1 , 4 0 0 lb s / a c @ $ 0 . 1 6 / lb ; $ 1 7 0 o p e r a t in g c o s t p e r a c r e p e a s ( y e llo w ) : 4 0 . 0 b u / a c @ $ 5 . 9 0 / b u ; $ 1 5 0 o p e r a t in g c o s t p e r a c r e s o y b e a n s : 3 0 . 0 b u / a c @ $ 9 . 8 0 / b u ; $ 1 7 5 o p e r a t in g c o s t p e r a c r e

durum quality lottery

Canola: Product Flow

2019 crop year in Million tonnes source: Statistics Canada, Canadian Grain Commission and Parrish & Heimbecker Limited

China west coast exports east coast exports

Japan

Pakistan & Middle East

• ther

Asia 0.7 3.1 2.1 1.2 0.3 1.0 0.6 0.2 7.9 9.3 domestic crush 0.5 Europe

Wheat1: Product Flow

2019 crop year in Million tonnes source: Statistics Canada, Canadian Grain Commission and Parrish & Heimbecker Limited

1 all wheat excluding durum

China

• west coast

exports

1.2

east coast exports Japan Bangladesh Indonesia Mexico

4.0 0.9

2.1 1.5 1.2 2.3 0.3 0.8 0.6 3.4 0.7 1.4

• ther

Asia 1.6 0.9 0.4 14.3 7.6

3.0 milling

total domestic Europe Africa east coast Africa west coast

Durum: Product Flow

2019 crop year in Million tonnes source: Statistics Canada, Canadian Grain Commission and Parrish & Heimbecker Limited

• west coast

exports 0.8 east coast exports 0.4 0.5 0.1 1.3 0.2 0.2 0.8 1.0 0.2 milling total domestic 1.5

0.2

1.0 Europe/N. Africa 2.2 Asia/Middle East (Japan and UAE) Europe North Africa

Questions?