Canola Markets Continue To Show Strength

That was the message from Marlene Boersch with Mercantile Consulting Venture.

 

She gave the Canola Market presentation during the Saskatchewan Crop Commissions Annual General Meetings.

 

When it comes to supply, most people agree on about 22 million tonnes, with exports between about 10 and 10.5 million tonnes and 10.2 million tonnes of crush with carryout stocks for canola in Canada are expected to fall significantly.

 

She says now in the second half of the crop year is when we start thinking about utilization, how that is developing and what that does to the remaining stocks.

 

"We are at record crush numbers, we just had the November numbers last Friday and in excess of 900,000 tonnes again. If you analyze, meaning if you take the first third of the crop year and analyze it to the full crop year we would be crushing 10.4 million tonnes. I don't think we'll reach that number simply because we don't have enough seed, but we're using 10.2 million crush for this ongoing crop year."

 

Boersch says crushers have all the incentive to keep going and keep utilizing their capacity because crush margins are in excess of $100 a tonne still.

 

She notes we had very good, year to date exports on canola.

 

We saw a big recovery in purchases by China, as they bought 932,000 tonnes to the end of November already.

 

The European Union is the single biggest importer of Canadian canola year-to-date, buying in excess of one million tonnes to the end of November.

 

Over the last two years their imports have really increased and last year they were incredibly important to make up the shortfall of exports into China.

 

So far, we have shipped 4.2 million tonnes year to date, compared to 2.7 million tonnes year to date.

 

She says our supply is down relative to the previous year, while our exports are up significantly by about a 1.5 million tonnes year-to-date.

 

Crush is a little bit behind last year's pace, as crushers have trouble getting more seed, but overall usage is up by 1.2 million tonnes over last year.

 

Supply and demand is tightening on Canola with prices hitting $15 a bushel already in Saskatchewan.

 

She says we're at some comfortable levels for Canola right now, $15 a bushel is very good, and probably worth a look.