Canada Markets

Canola Exports Ahead of Last Year Despite Negative Oilseed Data

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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@CliffJamieson
With 139,300 metric tonnes of canola shipped in the week ending Dec. 7, exports were at a four-week high. Weekly volumes (green bars) have struggled to reach the volume needed each week to achieve the annual target of 8.4 mmt (blue line) as measured on the left vertical axis. Year-to-date shipments (red line) are above the cumulative pace needed to reach the target (black line) as measured against the vertical axis on the right. (DTN graphic by Nick Scalise)
With 139,300 metric tonnes of canola shipped in the week ending Dec. 7, exports were at a four-week high. Weekly volumes (green bars) have struggled to reach the volume needed each week to achieve the annual target of 8.4 mmt (blue line) as measured on the left vertical axis. Year-to-date shipments (red line) are above the cumulative pace needed to reach the target (black line) as measured against the vertical axis on the right. (DTN graphic by Nick Scalise)

The USDA's December edition of Oilseeds: World Markets and Trade report indicates an increase in both production and ending stocks of the eight major oilseeds produced. Ending stocks are poised to be greater than 100 million metric tonnes for the first time ever at 104.06 mmt, up from 80.59 mmt last year and just 66.79 mmt two years ago. The largest change in ending stocks is seen with soybeans, with a forecast 35% year/year jump in ending stocks.

The same report increased global rapeseed/canola production from last month to 71.87 mmt, or 1.1% above 2013/14 production. Global exports are pegged at 13.65 mmt, slightly higher than last month but 9.7% below 2013/14. Global rapeseed crush is estimated at 66.92 mmt, down slightly from last month and 2.2% above year-ago levels. Ending stocks are estimated at 7.81 mmt, 1.65 mmt above last month and nearly 20% above 2013/14.

Signs of a meal-driven market continue to appear in current data. Of the eight major oilseeds presented, the global stocks/use ratio for all meal is 4.5% in 2014/15, unchanged from 2013 and within the range of 4.2% to 4.7% calculated between 2010/11 and 2013/14.

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The stocks/use ratio of rapeseed meal is tighter than the average for the eight major oilseeds, with the 2014/15 stocks/use ratio reported at a very tight 1.3%, although the highest level in three years.

The stocks/use ratio calculated for vegetable oils produced from the eight major oilseeds is calculated at 10.3% in 2014/15, much higher than seen in meal, although has fallen for the past three years. The stocks/use ratio for rapeseed oil is higher than the average of the eight major oilseeds, calculated at 13.9% for 2014/15, down just .1% from 2013/14. This is the highest stocks/use ratio seen across the eight major oils, with palm falling next at 12.9% and soybean oil at 6.9%.

Oilseeds are far from being in short supply globally, while the meal-driven market continues to limit canola's chances for a significant rally. Despite this situation, canola's export movement shows year to date exports of 3.1439 mmt to be 14% above year-ago volume as of week 18 or the week ending December 17, as reported by the Canadian Grain Commission.

As seen on the attached chart, weekly export volumes of licensed exports have achieved the weekly volume needed to meet the AAFC's export target on only four of the first 18 shipping weeks. This is seen on the chart in weeks 1,9,10 and 14. Large volumes shipped in week 9 and 10 have helped see the overall cumulative volume shipped remain above the weekly volume needed to achieve the 8.4 mmt target set by AAFC, as indicated by the red line trending above the black line, as measured on the secondary vertical axis on the right.

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

(ES)

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With 139,300 metric tonnes of canola shipped in the week ending Dec. 7, exports were at a four-week high. Weekly volumes (green bars) have struggled to reach the volume needed each week to achieve the annual target of 8.4 mmt (blue line) as measured on the left vertical axis. Year-to-date shipments (red line) are above the cumulative pace needed to reach the target (black line) as measured against the vertical axis on the right. (DTN graphic by Nick Scalise) 
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