Canola Shipments from World’s Top Exporter Slower than Expected
A lack of demand and low crush margins are causing Canadian canola sales to be slower than expected, according to Peter Schultz, canola merchant with Richardson International.
This year’s Canadian canola exports are estimated to be 7.6 million tons compare to 9.2 million tons the year before, according to Agriculture and Agri-Food Canada. Crush margins for the November contract currently stand at $38.73 as of September 18, compared to $87.96 at the same point last year, according to ICE Futures, while canola futures in the November contract closed September 21 at $468 per ton.
Meanwhile, despite China eliminating subsidized price supports for domestic canola producers, these changes came after this year’s crop was planted, meaning that an increase in Chinese canola imports will not likely occur until next year. In addition, Australia’s official crop bureau, Abares, has reduced its estimate for Canadian canola exports while lifting its estimate for Australia’s exports by 143,000 tons to 2.32 million tons. However, although the estimate for Australian exports is increased, it still represent export levels at a four-year low.