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.
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 firstname.lastname@example.org
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