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“You’re going to see more U.S. beans come into Canada, and more Canadian beans go to China,” Merkosky said.

Brokers such as Johnston’s Grain are looking at importing cheap U.S. soybeans into Canada for processing, and exporters may explore “arbitrage opportunities” for shipment overseas, Merkosky said. Prices for U.S. soybeans have plunged as demand from China declined and a bumper harvest looms.

Farmers in Canada are currently harvesting soybeans and canola to make meal for livestock and oil for cooking and fuel.

In the past two decades, Canada became the fifth-largest soybean exporter as farmers expanded acreage. Overseas sales are a fraction of the 75 million metric tons from Brazil and 56 million tons from the U.S. forecast to be shipped during the 2018-2019 crop year, according to the U.S. Department of Agriculture.

The USDA this month lowered its forecast for Canada’s shipments during the 2018-2019 crop year to 5 million metric tons from an earlier estimate of 5.5 million as drought reduced the crop. Still, Canada has exported 156,000 tons of soybeans since Aug. 1, more than double the same period a year earlier, the latest Canadian Grain Commission data show. The data does not break down shipments by destination.

Bloomberg.com