Evidence is adding up to show Western Canada really did grow a big canola crop last year, despite the drought.
A combination of ample supplies, expanded crush capacity and the lower Canadian dollar are driving a rapid pace in canola consumption this year, both domestically and through exports.
Canadian canola crush is up 12 percent from last year’s pace while exports are running 20 percent ahead of last year, according to Agriculture and Agri-Food Canada.
The Canadian Oilseed Processors Association says 188,081 thousand tonnes of canola were crushed domestically during the week ending March 16th — a new weekly record.
A total of 5.13 million tonnes of canola have been crushed during the 2015/16 crop year, up from 4.54 million at the same time last year. Crush capacity utilization for last week was assessed at 91.1 percent versus 82.0 percent a year ago and year-to-date capacity efficiency of 82.3 percent.
AAFC and the USDA are both pegging total canola crush for 2015/16 at 8.1 million tonnes.
“Canadian processors may set an all-time high for the canola crush this year,” said the USDA in its latest oilseed outlook, acknowledging the strong canola crush is weighing on soy meal values south of the border.
“US imports of canola meal for October 2015-January 2016 have already surged 13 percent ahead of the record 2014/15 pace. Such circumstances are applying further pressure to soybean meal prices,” stated the department.
While domestic crush is expected to consume at least 8.1 million tonnes, AAFC currently forecasts exports of 9.5 million tonnes in 2015/16, due to “strong buying by China, Japan and Mexico. Shipments into western Europe, Pakistan, Bangladesh, and the United Arab Emirates have also increased.”
As a result, canola carry-out stocks are projected by AAFC to fall by 25 percent, to about 1.85 million tonnes for a stocks-to-use ratio of 10 percent.
AAFC expects canola acres will rise by 4 percent to 20.8 million acres this summer.