Canada Markets
Canadian Canola Crush Margin Improves Rapidly
A calculation approximating the Canadian Canola Board Margin Index was shown to reach over $50/metric ton on Monday while seen on the attached graphic at $53.80/mt, up $12.17/mt from Friday, a continuation of a move that began after reaching a low of $17.63/mt on September 17. This is a high for the crop year, with Monday's highs taking out recent chart highs reached in late July.
A run in soybean oil and meal in recent weeks, along with Canadian dollar weakness and a canola market that has failed to keep pace with gains in soybeans is behind the move, making the canola crush viewed in the best light seen in four months.
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On Monday, the National Oilseed Processors Association in the U.S. reported the largest September soybean crush ever recorded at 160.8 million bushels, above pre-report estimates. There were signs of supportive commercial buying of soybean oil in Monday's trade, a positive signal, while the latest CFTC data as of October 9 shows investors trimming their bearish net-short position in soybean oil for the third straight week and to the smallest net short held since early June. Investors also added to their bullish net-long position in soymeal futures for the third straight week.
As of the Canadian Grain Commission's week 10 statistics, covering activity to the week ended October 7, a reported 1.619 mmt of domestic disappearance is reported, up 5.1% from the same week last crop year. Despite a pace ahead of last crop year, disappearance is just slightly behind the pace needed to reach the current 9.2-mmt crush target set by Agriculture and Agri-Food Canada. USDA continues to show Canada's estimated crush at 9.571 mmt, even higher than estimated by Canada's government.
Statistics Canada should release their September crush estimates in the next 7-10 days. Over the last five years, an average of 14.8% of the crop year crush was realized in the first two months of the crop year.
Cliff Jamieson can be reached at cliff.jamieson@dtn.com
Follow Cliff Jamieson on Twitter @CliffJamieson
(CZ)
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