Canada Markets

This week, Statistics Canada reported 829,490 metric tons (mt) of canola was crushed doing the month of August, up 31% from August 2022 and 17% higher than the three-year average for this month. At the same time, this volume is only 845 mt lower than the volume crushed in August 2020, or the highest August crush on record.

August activity was only slightly below the 833,333 mt needed this month (black line) in order to remain on a steady pace to reach the 10 million metric ton (mmt) crush forecast released by Agriculture and Agri-Food Canada, which was revised 300,000 mt higher in September, despite Statistics Canada's lower crop production estimate. At 10 mmt, the annual crush would be the third largest on record, next to the 10.129 mmt crushed in 2019-20 and the 10.425 mmt crush in 2020-21. As a result, the volume needed in the month of September grows slightly to 833,683 mt.

The ICE Canadian Canola Board Margin Index showed a continued huge incentive to crush over the month. The nearby index dipped to a low of $202.47/mt early in the month, while reaching a high of $252.79/mt late in the month, an index that was $50.92/mt higher than reported one year earlier. A ProphetX chart approximating the move of this index shows an average for the month at $228.37/mt, which compares to $184.49/mt for the previous month.

The same month shows 123,651 mt of soybeans were crushed in the month of August, or the last month of the crop year for row crops. This was down sharply from the 151,621 mt crushed in the previous month and the second-lowest monthly crush reported for the 2022-23 crop year. Over the crop year, 1.768 mmt was crushed, slighy below the 1.9 mmt AAFC forecast, down 4.8% from the previous crop year while 4.6% below the five-year average. The AAFC forecast for 2023-24 is left unchanged at 1.9 mmt.

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

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