Canada Markets

Statistics Canada's December Oilseed crushing statistics report shows 943,302 metric tons (mt) of canola crushed in December. This volume has increased month-over-month for a third time in four months, with favorable December weather conditions being supportive despite the holiday season.

This volume is above the 826,445 mt crushed in the same month of 2022-23 and is above the 858,221 mt needed this month to stay on track to reach the current Agriculture and Agri-Food Canada (AAFC) crush forecast of 10.5 million metric tons (mmt), which was left unchanged in this month's AAFC forecast for the current crop year and also repeated for the 2024-25 forecast. It is also above the three-year average of 811,906 mt.

During the first five months of the crop year, 4.578 mmt has been crushed, up 14% from one year ago when the 4 mmt mark had just been crossed, while 12.7% higher than the three-year average for this period. The total crush is 203,000 mt higher than the steady volume needed to reach the current 10.5 mmt AAFC crush forecast.

Statistics Canada data points to an oil content remained steady at 42.6%, the highest oil content seen since August 2021, or 28 months. The Canadian Grain Commission's analysis as of Nov. 30 is showing an Eastern Canada mean oil content for 2023 of 43.8% and a Western Canada mean oil content of 43.6% for No. 1 Canada Canola.

A ProphetX chart approximating the move in the ICE Canola Board Margin Index shows a mean index of $194.18/mt calculated for December, which compares to $220.07/mt for the previous month and down from the crop-year high of $231.40/mt, calculated using continuous active futures. The incentive to crush remains high.

The million-metric-ton monthly crush remains just out of reach, while the extreme cold event that hit the Prairies during January will see that it remains that way for at least another month. There are reports that new capacity may come into operation this crop year with the likelihood of even more in 2025, although AAFC has held both 2023-24 and 2024-25 crush estimates steady at 10.5 mmt, only slightly higher than the record 10.425 mmt reported for 2020-21.

Today's December report also includes 152,209 mt of soybeans crushed in Canada, down for a second month and the lowest volume achieved in three months. During four months of the crop year, the cumulative crush is 0.8% lower than the same period in 2022-23 and 1.1% higher than the three-year average. The December crush was below the volume needed this month to stay on track to reach the current AAFC forecast of 1.9 mmt, while the cumulative crush of 620,767 mt is slightly below the steady pace needed to reach this forecast.

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

Follow him on X, formerly known as Twitter, @CliffJamieson.

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