Canada Markets

For a second straight month, processors crushed more than 900,000 metric tons of canola across Canada, the only two months that this has been achieved. A total of 917,992 mt of seed was crushed in November, down from 931,060 mt in Oct. This volume is 10.7% higher than the same month in 2019-20 and well-above the steady pace needed to reach the current Agriculture and Agri-Food Canada forecast of 10.2 million metric tons, as shown by the horizontal line signaling a steady crush of 850,000 mt/month.

The cumulative crush of 3.465 mmt is also 4.7% higher than the same period last crop year. This month, AAFC revised its crush forecast from 9.8 mmt to 10.2 mmt, a volume that is 71,000 mt higher than the record achieved in 2019-20, while the cumulative pace during the first four months of the crop year is 65,112 mt higher than the steady pace needed to reach this revised forecast.

While there will be a need to ration demand this crop year due to tight supplies according to current forecasts, the incentive to crush remains high. The Dow Jones Canadian Canola Board Margin Index jumped from $88.59 mt on Tuesday to $113.49/mt on Wednesday this week, with a higher close for soybean oil and soymeal, a weaker Canadian dollar and a drop in canola futures a bullish combination of market moves. This move has seen this calculated margin retrace to where it was a month ago and is only slightly lower than the $121.27/mt reported one year ago.

The same report shows Canada's soybean crush at 148,652 mt, down from 160,074 mt crushed in October. During the first three months of the row-crop crop year (September through Aug), 448,164 mt has been crushed. This volume is up 5.6% from the same period in 2019-20 although 6.4% below the three-year average. This month, AAFC left its soybean crush forecast steady at 1.9 mmt, up 9% from last crop year due to increased supplies available.

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