Darwin Sobkow was announced Jan. 6 as the company’s new chief executive officer, effective Jan. 10 with the formal retirement of Curt Vossen, the company’s CEO since 1995.

Sobkow served as chief operations officer since 2020 for the Winnipeg-based, privately-held firm, an arm of family-owned James Richardson & Sons.

The company’s ag industry holdings include a network of 55 Prairie grain elevators; port terminals in B.C., Ontario and Quebec; canola crush plants at Lethbridge and Yorkton; oat milling facilities in the three Prairie provinces and one each in the U.S. and U.K.; several further-processing plants; and 93 Prairie ag retail outlets supplying seed and crop inputs to farmers in the region.

During a nearly 30-year stint as CEO, Vossen oversaw much of that expansion, including the acquisition of more grain elevators, mainly during other Prairie grain handlers’ mergers and divestitures—as well as acquisitions such as U.S. durum miller Italgrani USA and the U.S.-based Wesson cooking oil brand.

“Under his leadership and bold vision, Richardson International evolved into a world-class organization with expertise across its vertically integrated agribusiness and food processing operations,” the company said in its Jan. 6 announcement.

Richardson noted Sobkow, who started with Richardson in 1999 as executive vice-president for agribusiness operations and processing, was “instrumental” in those acquisitions and integrations.

His “operational expertise and deep industry knowledge will guide Richardson International into its next phase of growth,” the company said.

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The post Canola crush up in July, soybeans down  appeared first on Alberta Farmer Express.

In total, 1.074 million tonnes of oilseeds were crushed by Canadian producers last month, 159,000 more than one year earlier.

The May crush took in 920,432 tonnes of canola, turning them into 393,501 tonnes of oil and 533,645 tonnes of meal, according to StatCan’s monthly crush statistics released on June 26. By comparison, 769,942 tonnes were processed in May 2023.

In addition, 154,048 tonnes of soybeans were also crushed in May, with 28,059 tonnes used for soyoil and 119,745 tonnes for soymeal. The figure was larger than the 144,992 tonnes crushed 12 months earlier.

Canadian grain deliveries totaled 3.903 million tonnes in May, up from 3.125 million in May 2023.

All wheat deliveries were 1.883 million tonnes in May, up from 1.605 million one year earlier. From that total, 158,971 tonnes were durum, which declined from 198,154 tonnes in May 2023.

Canadian canola deliveries totaled 1.549 million tonnes in May, up from 1.003 million one year ago.

For barley, 324,633 tonnes were delivered last month, compared to 249,539 in May 2023. Oats saw their fewest deliveries in a month since July 2022 at 116,017 tonnes, down from 233,297 tonnes in May 2023. Flax deliveries were 28,249 tonnes, up from 21,337 tonnes in May 2023. Rye deliveries fell to 2,803 tonnes in May, down from 11,572 one year earlier. The monthly total was the lowest recorded for rye since May 2003.

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Commonwealth Bank of Australia is forecasting reduced competition from its main competitor and continued strong demand from its top export market.

Canada’s exports are forecast to decline due to rising domestic crush.

Canada has 14 crush facilities and 12.1 million tonnes of crush capacity. An additional 5.7 million tonnes of capacity are expected to be built by 2028, with a “large chunk” of that completed by 2026.

“In order for Canadian crush facilities to be able to obtain enough canola, there will need to be a substantial decline in canola exports,” stated the bank.

Canada’s canola plantings peaked at 22.9 million acres in 2017-18. Commonwealth Bank assumes that will be the maximum acreage.

Yields are forecast to rise by 2.5 percent per year, resulting in about 22.5 million tonnes of production by 2030.

Canada is expected to crush more than 16 million tonnes of that domestically, which doesn’t leave much for export.

“The less Canada exports, the less there is for Australia to compete with in international markets, creating price support,” stated the bank.

Australia’s crush capacity is tiny by comparison at 1.3 million tonnes. Expansions and new construction would add 220,000 tonnes of capacity by 2025.

The country’s canola sector will remain highly dependent on the export market.

Australia’s canola production has averaged 5.9 million tonnes over the past three years, with 80 percent of that destined for overseas markets.

Europe has accounted for 62 per cent of Australia’s export volumes over the past five years. However, sales to markets such as Japan, China, Mexico, Pakistan and Saudi Arabia are on the rise.

The European Union crushed 26.3 million tonnes of canola in 2023. It produced slightly more than 10 million tonnes of oil, seven million tonnes of which were used for industrial purposes, primarily biofuel production.

The EU’s domestic production of the crop has stagnated due to policies designed to reduce pesticide, herbicide and fertilizer use by 2030.

That has resulted in substantial imports of the crop to help fuel the biofuel sector.

The gradual transition to electric vehicles is expected to cause EU biodiesel consumption to decline by 10 percent between 2025 and 2030, according to the Commonwealth Bank report.

However, the EU is phasing out the use of palm oil as a biofuel feedstock by 2030. Palm oil accounted for 23 per cent of feedstock use in 2023.

As a result, Commonwealth Bank is forecasting that the use of canola oil in the EU’s biofuel sector will rise to 8.2 million tonnes by 2030, up from seven million tonnes in 2023.

The bank believes the EU will import 7.5 million tonnes of Australian canola by 2030, up from the recent five-year average of 5.9 million tonnes.

That bodes well for the country’s farmers.

“Increasing demand for vegetable oil overseas is expected to keep the price of canola and canola oil elevated to 2030,” stated Commonwealth Bank.

—Sean Pratt writes for the Western Producer from Saskatoon

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“The proposed merger brings to the forefront concerns about market concentration and its potential ripple effects on grain producers” said Tara Sawyer, chair of Alberta Grains in a news release today.

“Competition in the grain sector will directly influence concerns producers have raised regarding transparent, consistent, and efficient delivery contracts and market information.”

Early last week, Canada’s Competition Bureau said the proposed merger was “likely to result in substantial anti-competitive effects;” and would likely harm grain markets in the west and canola oil markets in the east.

The groups supported their concerns with a report from University of Saskatchewan researchers Richard Gray, James Nolan and Peter Slade. That report was funded by the Agricultural Producers Association of Saskatchewan (APAS), Alberta Grains, SaskBarley and Sask Wheat.

The researchers found that if the merger went forward as planned, the Bunge-Viterra conglomerate would control more than 45 per cent of grain export capacity at the Port of Vancouver. This, they estimated, would increase the price charged for export services by more than 15 per cent and would result in approximately $10-11 billion in loss for Western Canadian grain producers.

The study also found the merger would reduce the economic incentive to build a canola crush facility at Regina. If it was not built, industry crush margins would increase by 16 per cent. If the Regina facility is built, Bunge-Viterra would control 37 per cent of crush capacity.

“This concentration of market shares would increase canola crush margins by 10 per cent … leading to a non-transitory decrease in farm receipts,” the report says.

The total loss would be between $4 billion and $6.5 billion, researchers said.

The merger would have minimal effect on elevator concentration, the researchers found. They found only two small areas where producers would have only one elevator within a 100 km radius.

“However, the calculation … revealed surprising levels of spatial market concentration in elevation, in many cases
made considerably worse by the proposed merger,” the researchers said.

They calculated producer losses of $30 million to $45 million per year.

The groups “strongly urge the Federal Government to consider the impact of the proposed merger on the profitability and sustainability of farmers,” the news release said.

The next steps are for the government to identify any overlapping concerns related to competition and transportation and ask the companies to address them, according to the Competition Bureau’s report.

The two companies, in response to the Competition Bureau’s report, said they were confident the transaction would “yield considerable benefits to Canada.”

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A total of 10.523 million tonnes of canola were crushed in the country in 2023, which was up by 20.0 per cent from the previous year and above the previous record of 10.290 million tonnes set in 2020.

Meanwhile, Canada’s soybean crush decreased by 5.7 per cent in 2023 to 1.763 million tonnes. Oil production totalled 4.422 million tonnes for canola and 329,856 tonnes for soybeans. Meal production totalled 6.200 million tonnes for canola and 1.371 million tonnes for soybeans.

High prices and increased exports of canola oil were behind the strong canola crush pace, according to StatCan. In 2021, the price of canola oil increased by 65.2 per cent over the previous year, and it has remained elevated ever since. In 2023, Canadian exports of canola oil increased 20.3 per cent from 2022, totalling 3.150 million tonnes. This trend was underpinned by higher supplies of canola, as production of canola was 31.2 per cent higher leading into 2023 than in the previous year.

In the United States, over the 2023 calendar year, oilseed processors crushed 61.268 million tonnes of soybeans which was up by 2.6 per cent from the previous year. A total of 2.059 million tonnes of canola was crushed in the U.S, marking a 19.2 per cent increase from 2022. Oil production totalled 12.052 million tonnes for soybeans and 825,227 tonnes for canola, while meal production totalled 45.241 million tonnes for soybeans and 1.198 million tonnes for canola.

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The May canola contract closed at C$591.00 per tonne on Feb. 28, up from C$584.10 one week earlier. Prices started the week in decline until a two-day rebound after the weekend. Ken Ball, a Winnipeg-based trader at PI Financial, said canola’s behaviour was similar to other crops including corn, wheat and soybeans.

“They’re all showing a little hint of some short-covering (and uncovering) some support. But not enough to trigger a lot of excitement yet,” he said. “We don’t yet have a lot (of news) to go on. There’s not much sparking anything.”

With spring approaching, as well as potential lows in prices, Ball expects more short-covering in the coming weeks and end users to increase their coverage.

“The balance should start to shift, but it’s hard to say if there’s anything really big brewing right now,” he added. “As we move into the month of March, the markets have to get nervous about spring. There’s always some weather issues. We never have a smooth spring across all of North America generally.”

Soyoil placed large amounts of pressure on canola prices, according to Ball. Over the past 10 sessions, the May contract declined eight times and lost 1.74 U.S. cents per pound over that span.

“The stocks have tightened up, but we anticipated bean oil to be firmer than it has been. It’s been on the weak side,” he said. “It’s not showing a bottom at all. It’s still in a bit of a downward channel.”

While Canada’s canola crush has increased over the past year, exports have been down nearly 33 per cent, causing even more pressure on the oilseed. However, there are whispers that much-needed overseas demand may be coming.

“We’ve heard talk that China may have stepped up some canola buying over the last month or two, but it hasn’t yet showed up on the export (numbers). So far, it’s only been rumours, but the exports may perk up a bit as we go into spring,” Ball said.

He also described March as a “transitional month” as positions are exited prior to the expiry of March contracts. However, trading activity hasn’t changed recently, according to Ball. Right now, canola is still looking for a catalyst.

“We’ve had a little bit of moisture recently (on the Prairies), but we’ve barely made a dent in the drought in the real dry areas,” he said. “I’m not getting a lot of feedback from my clients this year about (canola) acreage decisions. I guess a lot of them are waiting longer than usual to make those decisions…I think we’re going to see canola acres come down a bit.”

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.

The post ICE weekly outlook: Canola seeking a catalyst appeared first on Alberta Farmer Express.

“The capacity of crush could grow from 11.3 million metric tonnes today to 18 million metric tonnes in three or four years,” said Chris Vervaet, executive director of the Canadian Oilseed Processors Association (COPA).

Vervaet was among the speakers at this year’s CropConnect conference in Winnipeg Feb. 14. His talk focused on the impact of renewable fuels on the canola value chain.

“This is unprecedented,” said Vervaet. “I’ve talked to folks who have been around oilseed processing for the better part of 30 or 40 years; they’ve never seen this kind of growth.”

Roughly 2.5 million tonnes of canola seed equivalent stocks are currently used for biofuel markets in Canada, the U.S. and the EU. Vervaet said it could grow to 5 million by 2026 and could reach as high as 8 million by 2030.

“We’re taking a stab in the dark here a bit, but we feel pretty optimistic about the role of biofuels in seed demand going forward,” he said.

To meet that demand, seven new Canadian facilities have been announced over the last three years to bolster renewable diesel production capacity.

“If it all gets built the way that it’s been described in their press releases, that could be 4 billion litres of capacity over the next four or five years,” said Vervaet.

South of the U.S.-Canada border, another 25 facilities are either operating, under construction or being planned. “If that all comes to fruition in a couple of years time, that’s close to 30 billion litres of production capacity,” said Vervaet. “This is a tremendous opportunity to see more value-added processing occur in Canada.”

–Further coverage to come. 

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Jerry Klassen of Winnipeg-based Resilient Commodity Analysis said that winter seasonal weakness is partially to blame for canola prices hitting lows unseen since June. However, canola’s record short position by the funds isn’t leaving much more room to sell. 

“(The funds) are running out of selling power. That selling may be easing up here and could ease up (later),” he said. “Sometimes you could see some volatile swings, but the overall trend remains lower.” 

Klassen added that a widening of the March/May spread put pressure on the nearby March contract, as well as declining crush margins. Vegetable oil markets also became weaker due to increased palm oil production in Indonesia and Malaysia, as well as Argentina’s soybean crop more than offsetting losses from Brazil. 

“We have some problems in Brazil, but it looks like the (soybean) crop there will be about the same size as last year. Despite the adverse weather, it doesn’t look like we’re seeing a significant year-over-year decline in production,” Klassen said. 

He is also hearing estimates for United States soybean seeded area later this year to be four million to five million acres more than in 2023, adding to the crop’s bearish outlook. 

“We’re also looking for a marginal increase in canola acres for new crop,” Klassen added. “The larger potential new crop (canola) production is overhanging the new crop supplies. That’s also setting a negative tone…The trade is coming to terms here that farmers have their seeding decisions ready and it looks like there’s going to be an increase in canola acres and a sizeable increase in U.S. soybean acres.” 

While dry weather in the Prairies this winter could impact canola production this year, Klassen added it’s too early to say if there will be a major effect. 

If the Canadian dollar stays at current levels, he believes that the March contract can go down to as low as C$600 per tonne, with little signs of support. 

“It’s really hard to argue for a bullish case,” Klassen said. “When we get to the end of March, when we’re going to that seeding period, usually the farmer selling tends to subside and we tend to get a bounce in the spring time frame. But that’s dependent on how conditions are…The demand (right now) looks pretty sluggish.”

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.

The post ICE weekly outlook: More room to the downside for canola  appeared first on Alberta Farmer Express.

“We have a fundamental picture in canola that looks reasonably comfortable as far as supply goes – there’s no great pressures,” said Ken Ball of PI Financial in Winnipeg, adding that the oilseed will need support from outside markets to move higher “and for now it’s just not getting it.”

While the domestic crush is running ahead of the year-ago pace, that may be contributing to softness in the United States soyoil market as more Canadian canola oil moves into the U.S. market, according to Ball.

The January canola contract traded just under C$650 per tonne a week ago before finding some support to move back towards the C$660 per tonne area on Dec. 13. However, from a chart standpoint, Ball expected values could dip to C$625 and added that “even going below C$600 wouldn’t be a surprise unless we get some support from the U.S. markets.”

South American growing conditions should be a major price driver in the soy market over the next few months. While parts of Brazil are struggling, Ball said the weather was looking reasonably favourable in Argentina with larger South American production on the year expected.

“It’s a complicated environment in the oilseeds right now… but for the moment the bias (in canola) is leaning to the downside,” said Ball.

— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg.

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