Solid crush more than makes up for slow canola exports

MarketsFarm — Canada’s ongoing diplomatic dispute with China may be slowing canola exports, but the strong pace of the domestic crush is more than making up for any shortfall in international business.

The Canadian Grain Commission reported total domestic disappearance of canola during the crop-year-to-date of just over 4.8 million tonnes, as of Sunday (Jan. 5).

That’s roughly one million tonnes ahead of the domestic disappearance during the first 22 weeks of the previous crop year and well above the 3.7 million tonnes exported to-date.

The export business was lagging the year-ago pace by roughly 600,000 tonnes. It also represents the slowest pace during the first five months of a crop year in six years.

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Crush margins remain very wide, trading at roughly $110-$120 per tonne above the nearby futures over the past month. Those margins were closer to $55 per tonne above the futures at the same time a year ago.

Crush margins are an indicator of the profitability of the product values relative to the seed cost when processing canola, with exchange rates also factoring into the equation.

— Phil Franz-Warkentin reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

UPDATE, Jan. 19, 2019 — The Canadian Grain Commission has since revised the data shown in this article, citing a reporting error.

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