Though the report was delayed, it was not disappointing. February canola crush totaled 812,633 tonnes, up 28 percent from last year’s February total and the largest total crush on record for February. The month-over-month total was lower, but we’ve seen several monthly crush records set this crop year to date—not to mention the fact that a seasonal dip in February is the norm. Also worth noting is that the month-over-month drop this year was lighter than in the previous three years.
Looking at the cumulative total, crush continues to run at a record pace: From August to February, crush has totaled 5.9 million tonnes. As highlighted in the following chart on the right, that sum is well above other years and nearly 10 percent ahead of last year’s pace. That is helping offset the decline in exports, year-over-year. Oil and meal production also hit a record for February following the record crush total.
Margins remain strong overall for the industry, although they have tightened slightly from recent highs. The demand for meal is expected to remain strong. Canada’s pork export program is up significantly for the first two months of the calendar year. Overall, March crush is forecast to stay in the pattern of strong monthly totals despite the slowdown in the economy due to the coronavirus.
Given the overall strong margins and robust demand from a meal standpoint, FBN anticipates that crush will remain at a record pace in the coming months. Coupled with an export program that has been improving, that is expected to keep canola stocks from increasing this crop year.
The strong crush is a positive for the producer, but prices have yet to react in an upward swing. FBN remains optimistic from a pricing standpoint. With the 2019/20 balance sheet forecast to have a reduction in stocks and the current price environment likely not buying in acres, the stocks situation for the coming crop year could be tighter.
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