Canada Markets

Canola Crush Lags Forecast With the Potential to Post Record

By Cliff Jamieson , Canadian Grains Analyst
The following chart represents year-to-date crush statistics from the Canadian Oilseed Processors Association. The black line represents the cumulative year to date pace required to meet the current annual target as assessed by Agriculture and Agri-Food Canada, while the red line represents the actual year to date volume, both measured against the right vertical axis. The green bars represent the actual weekly crush, while the blue line represents the weekly crush needed to meet the current annual target, as measured against the primary vertical axis on the left. (DTN Graphic by Scott Kemper)

Canadian canola crush statistics as of Oct. 9 suggests that the year-to-date crush slightly lags the required pace needed to hit the 6.9 million metric tonnes crush forecast, as estimated by Agriculture and Agri-Food Canada in their Sept. 18 supply and demand tables. Note that this target could potentially be revised in the next week.

The current year to date crush is 1.095 mmt, which lags the 1.327 mmt target by 232,000 mt as of the tenth reporting week this crop year, assuming a steady weekly pace of 132,692 metric tonnes (6.9 million metric tonnes divided by 52 weeks).

While domestic crush got off to a slow start early in the crop year, the past three weeks has seen the weekly crush exceed the pace required to meet the weekly crush needed to meet the 6.9 mmt annual target, as seen on the attached chart where the last three green bars exceed the blue line.

Given that the Canadian Canola board Margin Index, a measure of the trend in processing returns posted by the ICE Canada Exchange, is indicating a spot return of $104.61/mt as compared to $51.92/mt one year ago, it would appear that one can look forward to an aggressive crush pace moving forward. The record crush was 7 mmt in 2011/12, a level which could well be exceeded this crop year.

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

(AG)

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