VANCOUVER SHIPINVEST Canadian Grain Overview Casey McCawley - PowerPoint PPT Presentation

VANCOUVER SHIPINVEST Canadian Grain Overview Casey McCawley October 2019 Vancouver, BC

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 Russia Ukraine 38 days 18 days Canada Kazakhstan 58 days 49 days E.U. 28 days U.S. China Japan North Africa 1 180 days 411 days 56 days 108 days HRW 208 Nigeria HRS 198 138 S.E. Asia 2 SRW 14 days 110 white 70 days India durum 158 MidEast 3 77 days Brazil 104 days 36 days Australia Pakistan 104 days days Argentina 32 days Wheat Ending Stocks including China 0 excluding China 6 7 9 6 7 0 7 2 8 7 0 1 5 4 7 4 5 0 4 2 1 3 0 1 7 8 2 3 1 9 9 7 6 6 8 8 8 8 9 8 7 8 8 6 6 8 9 9 8 8 9 9 8 8 8 8 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 2 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 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

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 E.U. 22 days U.S. China 42 days China 68 days MMT Mexico 49 days S.E. Asia 1 49 days Brazil 166 days Paraquay 86 days Argentina 166 days 116 106 106 107 105 99 96 95 94 93 89 87 86 84 81 81 78 75 74 73 68 69 68 68 66 Soybean Ending Stocks 57 51 42 including China 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 1 Indonesia, Malaysia, Philippines, Thailand, and Vietnam. 2 domestic consumption plus exports for export regions and domestic demand for all other regions

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 South Korea Ukraine Canada 64 days 8 days 57 days E.U. 38 days U.S. Japan 50 days China China Egypt 33 days 258 days Mexico MMT 44 days 24 days S.E. Asia 1 24 days Brazil 30 days Argentina South Africa 42 days 60 days 0 1 8 7 4 2 3 2 1 9 1 6 5 5 1 4 1 1 1 4 1 1 0 0 0 0 1 1 0 0 1 1 8 1 1 1 1 3 1 9 9 9 9 2 8 4 8 9 7 4 3 6 0 9 9 8 Corn Ending Stocks 6 5 6 5 5 1 6 5 9 5 5 4 including China excluding China 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 2 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 1 Indonesia, Malaysia, Philippines, Thailand, and Vietnam. 2 domestic consumption plus exports for export regions and domestic demand for all other regions

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 Overall PrairieRegion Average 0.700 0.600 0.500 0.400 0.300 0.200 0.100 0.000 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 3 3 4 4 P P P P P P P P P P P P P P P P P P P P P P P P P P P O O O O O O O O O O O O O O O O O O O O O O O O O O O R R R R R R R R R R R R R R R R R R R R R R R R R R R C C C C C C C C C C C C C C C C C C C C C C C C C C C current crop year 5 year avg +/- 1 st. dev. NDVI above 5 year average NDVI below 5 year average scale 100% 78% 55% 33% 10% 75 km radius

Prairie Grain Production Million tonnes source: Statistics Canada and Parrish & Heimbecker Limited Prairie Provinces Crop Production million tonnes 90 80 70 60 48 37 37 41 39 41 42 50 41 37 30 33 35 40 41 35 38 38 35 33 30 31 20 23 10 21 20 19 18 18 18 16 14 14 13 13 13 9 9 10 7 8 7 5 4 0 F 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 0 2 Canola Cereal Grains1 Pulse Crops2 Soybeans other Field Crops 1 includes all wheat, barley, oats, fall rye, canaryseed, triticale and mixed grains 2 includes all dry peas, lentils, chickpeas and fababeans

Harvest Progress Part 1 Map shows Regional Harvest progress source: Provincial Agricultural Ministries and Parrish & Heimbecker Limited Mid September Avg: 50% Limited harvest progress before mid September 1 8 2 3 4 6 Alberta Saskatchewan Manitoba weather challenges resulting 5 in limited supply of high 2 5 Western Canada overall quality durum and spring 1 1 canola wheat. 3 2 4 spring wheat 1 3 1 0 7 1 0 1 8 1 3 2 4 9 1 3 2 3 3 5 3 3 1 3 6 5 1 4 5 1 3 7 2 9 3 0 1 9 6 0 4 9 3 5 5 0 3 5 5 4 3 6 2 7 2 5 4 0 0 0

Harvest Progress Part 2 Map shows Regional Harvest progress source: Provincial Agricultural Ministries and Parrish & Heimbecker Limited End of September Avg: 75% End of October Avg: 95%+ Need good October 3 5 4 7 6 7 harvest weather to Alberta Saskatchewan Manitoba complete 2019 1 6 4 7 Western Canada overall harvest. Quality issues 2 8 canola have already occurred 1 9 4 9 spring wheat 5 3 specifically on cereals 3 3 1 8 3 4 5 4 grains 4 5 4 4 2 8 2 4 4 6 7 0 5 7 4 3 6 5 2 5 7 6 7 2 5 1 3 3 6 3 7 0 7 9 5 8 7 3 5 4 8 2 7 0 4 6 4 4 4 8 0 0

2019 Crop Margins source: Parrish & Heimbecker Limited 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 #1 Durum & 1 C W A D 1 3 . 0 Canola c a n o l a s o y b e a n s o a t s durum 1 C W R S 1 3 . 5 quality p e a s ( y e ll o w ) lottery 1 C P S R 1 1 . 5 2 C W R S 1 2 . 5 f e e d b a r l e y Feed Wheat r e d l e n t ils f i x e d & Lentils c o s t s f e e d w h e a t $ 0 $ 2 5 $ 5 0 $ 7 5 $ 1 0 0 $ 1 2 5 $ 1 5 0 $ 1 7 5 $ 2 0 0 M a j o r A s s u m p t i o n s 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 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 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 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 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 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 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 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 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 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 o 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

Canola: Product Flow 2019 crop year in Million tonnes source: Statistics Canada, Canadian Grain Commission and Parrish & Heimbecker Limited domestic crush 0.6 west coast Europe 7.9 9.3 east coast exports 0.7 exports 2.1 Japan 0.5 Pakistan & Middle East China 3.1 1.0 0.2 other 0.3 Asia 1.2

Wheat1: Product Flow 2019 crop year in Million tonnes source: Statistics Canada, Canadian Grain Commission and Parrish & Heimbecker Limited 7.6 total domestic 0.8 3.0 milling west coast Europe east coast 14.3 - 0.9 exports exports 1.5 Japan 4.0 1.2 2.1 China 0.6 Bangladesh Mexico 0.3 0.7 1.2 2.3 Africa east Indonesia coast 1.6 1.4 other 3.4 0.9 Asia Africa west coast 0.4 1 all wheat excluding durum