Canada Markets

Statistics Canada reported 826,445 metric tons (mt) of canola crushed in December, slipping lower for a second month. The holiday season and adverse December weather contributed to the reduced volume, although the December crush has only fallen below the November volume crushed in two of the past five years, which happens to be the past two years.

This volume is 17.3% higher than the same month of 2021, while is 1.2% lower than the three-year average for this month. The cumulative crush of 4.016 million metric tons during the August-through-December period is 5.6% higher than the same period in 2021-22, while is 2.7% lower than the three-year average.

The brown line on the attached chart shows the volume needed each month to reach Agriculture and Agri-Food Canada's (AAFC) 9.5-million-metric-ton crush forecast, with the monthly volume surpassing this requirement for three consecutive months, including the month of December.

A ProphetX chart approximating the move in the ICE Canola Board Margin Index shows a mean index or board crush of $213.85/mt, well below the $285.74/mt calculated for the previous month, while compares to the minus $139.93/mt calculated for the same month in 2021 and signals a continued huge incentive to crush.

Based on Statistics Canada reporting, the oil content increased this month to 41.8%, equal to the level calculated for September, while the cumulative average is 41.5% since August. This compares to the 41.8% average for 2021-22 and remains well below the average over the past three crop years of 43.1%.

Statistics Canada also reported that 163,347 mt of soybeans were crushed in December, up from the previous month. This volume is up 0.2% from the same month in 2021 while is up 2.7% from the three-year average.

During the first four months of 2022-23 (September to December), 625,826 mt has been crushed, up 1.9% from the same period in 2021-22 and is 4.2% higher than the three-year average.

AAFC has currently forecast the 2022-23 crush at 1.9 mmt, while the current pace of crush is slightly below the steady pace needed to reach this forecast.

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

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