Canada Markets

Canadian Canola Crush Margin Improves Rapidly

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
Connect with Cliff:
An approximated calculation for the Canadian Canola Board Margin Index shows strength for the fourth consecutive session to levels above $50/mt on Monday, the highest level seen this crop year and the highest level seen since June. (DTN graphic by Cliff Jamieson)

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.

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

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)

P[] D[728x170] M[320x75] OOP[F] ADUNIT[] T[]
P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]

Comments

To comment, please Log In or Join our Community .