The oil content in this year’s canola crop appears to be down from last year and while that might cut into crusher profits, it has not slowed the pace of crush.
The oil content in samples of No. 1 canola sent to the Canadian Grain Commission to Oct. 29 had a mean of 43.5 percent, down from last year’s mean of 45.2 percent. Last year’s mean was well above the 10-year mean of 43.8 percent.
Lower oil content means crushers must process more than last year to get the same amount of oil. Reuters estimates that crusher profit margins drop by $8 per tonne for every one percentage point drop.
The lowest reading is in Manitoba, where the mean oil content is 41.8 percent, down from 44.2 percent last year.
Saskatchewan is 44.2 percent, down from 45.4 percent last year and Alberta, including British Columbia, is 44.1 percent, down from 45.6 percent. However, crushers are operating at a good pace.
Members of the Canadian Oilseed Processors Association had crushed 1.77 million tonnes of seed to the end of October, up 15 percent over last year at the same time.
The crush pace will likely fall later in the year because the available supply is smaller and export demand presents strong competition.
Agriculture Canada forecasts that crush in 2012-13 will fall seven percent from last year.
The U.S. Department of Agriculture updates its estimates of domestic and international crop supply and demand Nov. 9. The market fell early this week on expectations the USDA will increase its estimate of U.S. soybean production.
We’ll cover the USDA report in the daily news section at Producer.com and in the Daily Canola Report on Producermobile.com.
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