Canada Markets

Statistics Canada reported the December canola crush at 846,481 metric tons, not only the highest monthly crush achieved this crop year but the second highest monthly crush ever, next to the 870,998 mt crush in October 2017.

Over the first five months of the crop year, 3.895 million metric tons has been crushed, up .4% from the same period last crop year while 5% higher than the five-year average. The 2018-19 cumulative crush is roughly 62,000 mt ahead of the steady pace needed to reach AAFC's latest 9.2 million metric ton crush for the 2018-19 crop year, a forecast released in the agency's December report.

An approximation for the Canadian Canola Board Margin Index generated by ProphetX results in a mean index of $60.50/mt for the December, up $13.04/mt or 27.5% from November. At the same time, this remains well-below the $79.78/mt average calculated for December 2017.

The oil content of the seed crushed was reported to increase in the monthly data for the first time this crop year to 43.5% in December. The cumulative oil content based on Statistics Canada data is shown at 43.6%, down from 44.4% calculated for the same period in 2017-18 while close to the three-year average (2015-16 through 2017-18). This continues to remain below the 44.2% average reported by the Canadian Grain Commission's Preliminary quality data of Western Canada 2018 report, as of Nov.20, a number that represents the mean oil content on the 1,693 samples of No. 1 canola in Western Canada and representing 80% of all samples received.

While the crush data remains favorable, lagging exports continue to act as an anchor that is contributing to the range-bound trade that canola is facing.

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Cliff Jamieson can be reached at cliff.jamieson@dtn.com

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