* Ontario got timely rain, produced record crop
* Corn shipments seen rising ahead of Great Lakes season
By Rod Nickel and Karl Plume
WINNIPEG, Manitoba/CHICAGO, March 19 Canadian
corn is flowing to U.S. ethanol plants and feed suppliers in
larger than usual volumes, with up to 1 million tonnes expected
in 2012/13, as a large Ontario crop backfills demand after last
year's severe U.S. drought.
Canada is normally a net importer of corn, feeding Eastern
Canada's pigs and poultry and supplying Ontario ethanol plants.
But the worst U.S. drought in more than 50 years has forced corn
buyers to look north.
"Ontario had not a lot of rain last year, but it was timed
almost perfectly so we had the biggest corn crop in history in
Ontario in 2012," said Steve Kell, grain merchant at Parrish &
Heimbecker (P&H). "It's just a natural redistribution. And it's
Ontario accounted for about two-thirds of Canada's 13.1
million tonne corn harvest.
Kell expects more than 1 million tonnes of Ontario corn to
move into the United States in 2012/13, and maybe more if there
are U.S. corn planting delays.
That would be the second-biggest Canadian corn export
program on record, after nearly 1.7 million tonnes were shipped
two years earlier following a poor coarse grain harvest in
Agriculture and Agri-Food Canada forecasts total Canadian
corn exports to more than double in 2012/13, to 1 million
tonnes, from the previous year.
The U.S. Department of Agriculture increased its corn import
forecast this month to 125 million bushels, the highest on
record and up from an estimated 29 million bushels in the
2011/12 marketing year. Nearby corn futures on the Chicago Board
of Trade have pulled well back from the record high they set in
August, but are still 12 percent higher year over year.
U.S. corn imports from Canada are not unusual, although the
amounts this year are.
"Mostly it's just small domestic rail shipments. It's mostly
for feed, kind of the same path it always takes, showing up in
Ohio and a few other places," said one U.S. grain exporter.
"Corn has been on pace to reach the USDA's import number,"
Canadian exporters say Ontario corn is flowing into Michigan
and New York ethanol plants in particular.
The Great Lakes will open for navigation later this month,
and there has been increased movement of corn to terminals on
the lakes to prepare for transport by ship, Kell said. Once ship
traffic begins, Canadian corn can more easily reach markets like
Toledo, Ohio, he said.
Winnipeg, Manitoba-based P&H has five grain terminals on the
Great Lakes in Ontario and three of those - at Goderich,
Hamilton and Owen Sound - are actively moving Canadian corn, he
It's unlikely that Canadian supplies are weakening U.S. corn
basis levels much, said Lynne Cohoe, owner of Homeland Grain
Inc, a grain dealer at Burgessville, Ontario. The company has
consistently shipped most of its corn sales into the United
States for the past two months.
Still, the influx of Canadian corn had kept a lid on basis
in the closely watched Toledo market and could continue to
anchor values once lakes shipping resumes. The corn basis bid at
a major grain company's Toledo terminal eased by 5 cents a
bushel this week to the lowest level in nearly a month, largely
due to a wave of U.S. farmer selling of old-crop corn last week.
Canadian supplies come to the United States with additional
freight costs, as well as extra time and paperwork to cross the
border, Cohoe said.
"Obviously our basis is considerably lower than in the U.S.
and that's why (corn) is going there," she said. "It's a benefit
for everybody right down to the producer because it's certainly
raising basis bids in Ontario, or at least keeping them from
Agriculture Canada expects Canadian corn plantings for
2013/14 to ease slightly to about 3.5 million acres, but brisk
exports may tempt farmers to sow more acres, Kell said.
"It says that we can produce more and move it. People have
confidence that the market is a lot deeper than people thought
is was before."
Parts of the southern U.S. Plains have also seen intense
drought, but Canadian shipments of soft red winter wheat from
Ontario have been modest, Kell said.