Canada Markets

Statistics Canada reported a record canola crush of 931,060 metric tons in the month of March, up 18.5% from September, up 5.5% from Oct. 2019 and 10% higher than the three-year average. This volume was well-above the steady pace needed to reach the current Agriculture and Agri-Food Canada forecast of 9.8 mmt, calculated at 816,667 mt, shown by the horizontal green line on the attached chart. Given the volumes crushed in the first two months of the 2020-21 crop year, roughly 818,444 mt was needed this month to stay on track.

Year-to-date crush totals 2.547 million metric tons, up 2.7% from the same period last crop year and 9.8% higher than the three-year average. Over the balance of the crop year, roughly 806,000 mt is needed to be crushed each month in order to stay on track to reach the current 9.8 mmt AAFC forecast.

In its Nov. supply and demand estimates, AAFC left unchanged its crush forecast at 9.8 mmt, a volume that is down 329,000 mt from 2019-20. AAFC commentary points to the notion that both exporters and crushers will eventually fight over supplies, although they continue to forecast a 2.250 mmt carryout as of July 31, 2021, which one would think would allow both sides to increase activity from 2019-20 levels. Statistics Canada's Dec. 3 final production estimates will play a role in determining the potential for the balance of the crop year.

The Canadian Canola Board Margin Index closed at $113.23/mt on Monday, down from recent highs in the $120 to $130 range but remains $15.06/mt or 15.4% higher than the same day in 2019, providing ample reason to crush. A ProphetX chart approximating the move in the index shows the current index compares to the 2019-20 average of $84.33/mt and the three-year average of $77.77/mt.

Statistics Canada data shows the canola oil content falling for four consecutive months to 43% in the month of October, down from the 2019-20 average of 43.8%. The October percentage was the lowest seen in two years, which bears watching. The Canadian Grain Commission's Harvest Sample program as of Nov. 19 shows that 2,143 samples have been graded this fall (all grades) with the mean oil content at 44.4%.

Today's report also shows 160,074 mt of soybeans crushed in Oct., the highest volume crushed in six months, up 7.6% from Oct. 2019 and 7.6% below the three-year average for this month. The oil content was reported at 18.4%, up from 18.2% for Oct. 2019 and compares to the three-year average of 18.3%.

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

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