Canada Markets

Knock on wood, but Canada's canola crush numbers indicate the industry is perhaps off to the best start ever, according to Canadian Oilseed Processor's weekly data, despite the bearish situation facing the global vegetable oil industry.

The 759,110 metric tonnes of crush between Aug. 1 and Sept. 10 is 47.5% ahead of last year's pace while also ahead of the 715,794 mt crushed as of Sept. 12, 2012, as the country's large carry-in from last crop year supported increased activity prior to harvest.

As noted on the attached chart, the weekly crush pace so far this crop year remains behind the necessary pace needed to meet the most recent annual target of 7.5 mmt set by Agriculture and Agri-Food Canada (AAFC), while the cumulative volume, shown by the red line as measure against the secondary vertical axis on the right, is 106,300 mt behind the cumulative pace required to meet the annual target, although there is plenty of time left.

The Canadian Canola Board Margin Index, a proxy for returns generated by the canola crush, improved $9.55/mt today, a 12% increase to $90.20/mt, although remains well-below the year ago-level of $115.28/mt. Today's move lower in the Canadian dollar of approximately 30 basis points as well as the 1.06-cent increase in soybean oil futures helped boost this return.

Soybean oil trade for December delivery posted a bullish outside weekly bar this session, with this week's trading range both higher and lower than last week's range, with a close near the upper end of the range. A move above 33.71 cents/lb, the previous four-week high, could signal a move to an uptrend for this market.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Follow Cliff Jamieson on Twitter @CliffJamieson

(ES)

© Copyright 2014 DTN/The Progressive Farmer. All rights reserved.