Domestic canola crush and exports are running ahead of last year at this time, strongly supporting canola prices.
Statistics Canada on Dec. 3 pegged the crop at 11.87 million tonnes, up 14 percent from September.
Normally, that would pressure prices but as we reported last week, traders shook off the news and focused on demand.
And demand is hot.
Canadian Oilseed Processors Association members crushed 2.14 million tonnes by Dec. 8, up 55 percent from 1.38 million at the same time last year.
Earlier this crop year, some thought exports would be down from last year because of China’s import restrictions.
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Seed exports to China are down, but the shortfall is more than made up by increased movement to other countries.
The Canadian Grain Commission’s latest weekly export report shows that to Dec. 5, Canada had exported 2.63 million tonnes, up from 2.56 million last year.
Destinations of the shipments are in the CGC’s monthly report and it says that to the end of October, movement to China was 235,700 tonnes, down from 657,400 tonnes last year.
However, shipments to Japan were up 153,000 tonnes, as were shipments to the United Arab Emirates.
Pakistan took about 140,000 tonnes compared to nothing at this point last year. Bangladesh and Portugal each have taken a little less than 50,000 tonnes, when last year at this point, they had taken none.
Exports averaged about 147,000 tonnes per week so far this year. If that were to continue for the whole crop year, that would amount to 7.59 million tonnes.
Domestic crush has averaged about 119,000 tonnes per week, and extended for the whole year, that would be 6.18 million tonnes.
Throw in 200,000 tonnes for feed, waste and dockage and you get total use of 13.97 million tonnes.
This year’s total supply – production plus the carry in – is 13.99 million tonnes.
That would leave almost no yearend stocks and that is not going to happen.
Exports will likely slow a bit through the coldest part of winter. Also, current high prices will likely ration offshore demand.
However, we know year-end stocks will be tight.
Acreage next year will rise, weather permitting, and it is a good idea to consider locking in profitable prices this winter, while the market is focused on hot demand and tight stocks, for some of next year’s production.
