Canada Markets

The July canola crush ended the crop year on a strong note despite tight prairie supplies, indicating that the crushers were well-positioned to meet late-crop year demand. Statistics Canada reported the crush at 773,998 metric tons, the largest seen in eight months and the fourth largest seen during the 2021-22 crop year.

The crop year crush totals 8.555 million metric tons (mmt), down 17.9% from the previous crop year and 14% below the three-year average. For comparison, canola exports are currently forecast to fall by 51.4% year-over-year. Total crush surpassed Agriculture and Agri-Food Canada's forecast of 8.3 mmt by 255,000 mt, as indicated by the difference between the green line and blue bar on the attached chart.

The oil content reached 41.92% in July, only slightly higher than the previous month while the highest monthly percentage calculated since August 2021. The average over the crop year was 41.8%, down from 43.4% in 2020-21 and the five-year average of 43.8%. This is the lowest oil content seen since the 2004-05 crop year, when the oil content reached 41.1%. This calculation ranges from 41.1% to 41.6% in the three years from 2002-03 to 2004-05.

Agriculture and Agri-Food Canada has forecast the canola crush to rebound by 1.2 mmt, or 14.5%, to 9.5 mmt in 2022-23, although based on the final crush for 2021-22, this would reflect a 945,000 mt increase in the year-over-year crush, while production is forecast to rise close to 6 mmt. The current ICE Canola Board Margin Index is close to $200/mt and forward indices are above $100 for the entire 2022-23 crop year and means the crushers will remain aggressive in sourcing supplies.

Also in this report, we see 160,176 mt of soybeans crushed in July, up from the previous month while only slightly higher than the four-month average. Over the first 11 months of the soybean crop-year (September to August), 1.716 mmt has been crushed, while on track to meet-or-exceed the 1.8 mmt forecast released by AAFC this month. This volume is up 219,948 mt from the same period in 2020-21 while marginally higher than the five-year average.

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

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