Canada Canola: Board Crush Margins Average $200 per Ton
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Canola ending stocks for both the current marketing year and 2023-24 were raised slightly by Agriculture and Agri-Food Canada (AAFC) in its latest supply/demand projections. The Government agency lowered its Canola export forecast for 2022-23 by 200,000 tons from March, now pegging movement at 8.4 million tons. With domestic usage left unchanged at 9.738 million tons, ending stocks were raised to one million tons from 800,000 the previous month. The Canola carryout for 2023-24 was upped to 1.05 million.
The Canadian Grain Commission reported that during week 29 of the crop year, growers delivered 418 thousand MT of Canola into primary elevators; exports were at 191 thousand MT, while the domestic disappearance amounted to 180 thousand MT. YTD Canola disappearance into week 29 of the crop year is 19% above last year’s usage (+1.7 million MT) and amounted to 10.6 million MT compared to 8.9 million MT last year.
Visible stocks were shown at 1.3 million MT, with 726 thousand MT in primary elevators, 224 thousand MT in process elevators, 222 thousand MT in Vancouver/ Prince Rupert, and 138 thousand MT in eastern ports. Year-to-date total deliveries of Canola into the handling system over total YTD usage (export and crush) are at 535 thousand MT, so the pipeline remains tight.
Statistics Canada reported the January 2023 crush at 875 thousand MT, the second-highest January crush over the past six years. The YTD crush (Aug. 2022 – Jan. 2023) amounts to 4.9 million MT, compared to 4.5 million MT last year and 5.3 million MT the year prior. Annualizing the YTD crush would result in 9.8 million MT for a year. Domestic crush is forecast to reach 10 million MT this year. Prices in Canada are high because of strong domestic demand, with board crush margins averaging over $200 per ton.
China remains the major buyer of seed, which will continue while Rapeseed oil commands a premium in China. (China bought 58% of all Canadian Canola exports into the end of December 2022, the latest official export statistics by destination.) Rapeseed oil currently fetches an 8.8% premium over soybean oil.
As per AgFlow data, Canada exported 1.2 million tons of Canola to China in Q1 2023, followed by Mexico (0.16 million tons), Japan (0.11 million tons), and Saudi Arabia (60,000 tons). China is Canada’s top Canola market by a long shot. The Asian giant purchased 1.99 million tons of Canola through the first half of the 2022-23 crop year, or 49 percent of total sales.
Canola Seeding in Canada
The yield advantage for early seeding — with all else being equal — can be significant. Seeding early, providing that crop conditions allow for it, is a relatively low-cost way to increase yield and profit from the crop.
Seeding could be considered early, from late April to mid-May, but varies by region. In the southern Prairies, early seeding usually allows the crop to utilize winter and early spring moisture more effectively. It may help the crop avoid the highest summer temperatures during flowering. Early season moisture from snowmelt can be critical to facilitate the shallow seed placement required for maximum emergence and good seedling establishment and growth. Missing this early-season moisture forces the crop to rely more heavily on subsequent rains.
Early seeding increases the risk of stand loss due to lethal spring frosts, but Canola seedlings that are slow growing and have hardened off can withstand some early season frost. Early seeding can decrease the risk of yield and quality loss due to fall frost damage. Seeding early may reduce the overall frost risk since spring stands severely damaged by frost still have ample time to recover or to be reseeded.
Other sources: SASK CANOLA
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