Canada Markets

For the first time this crop year, the weekly data from Canadian Oilseed Processors Association reflects a year-to-date crush that exceeds the year-to-date crush for the same week the previous year. As of the week ending June 11, the crop year's cumulative crush was 5.906546 million metric tonnes, while the year-ago figure was reported at 5.899544 mmt.

This could be viewed as disappointing given that last fall's harvest of 17.960 mmt is 29.5% higher than the previous year, while favorable crush margins, canola's weak price relative to soybeans and the addition of crush capacity would be expected to lead to higher disappearance. Crush capacity utilization over the year has averaged 80.3%, down 4.1% from the previous year.

Challenges faced by the industry included a late start due to tight supplies in August and September, combined with a late harvest. Logistical challenges over the winter also affected plant performance, as was the case throughout the grain industry.

As can be seen on the attached chart, the upward-sloping red line, which reflects the cumulative crush as measured on the right vertical axis, continues to lag the steady crush needed to meet Agriculture and Agri Food Canada's estimated crush of 7.2 mmt, reflected by the upward-sloping black line. The current data would indicate the current crush to be 324,000 mt behind the pace needed to meet the target.

This data is neither positive nor negative for the crop, given that the pace of exports is ahead of the pace needed to meet the current 8.1 mmt export target. Licensed exports reported by the Canadian Grain Commission as of week 44, or the week-ended June 8, are 468,000 mt ahead of the pace required to meet the 8.1 mmt export target set by AAFC. In addition, a further 280,265 mmt of unlicensed exports are reported as of the end of March. It would not be a surprise to see AAFC tighten their carryout forecast when this month's supply and demand tables are released.

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

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