25,600 MT Soy Oil sales to Canada?

[Kasro]

USDA export report this morning shows 25,600 MT of soy oil sales to Canada.

Explanations anyone?

How normal is this?

[charliep]

Not that abnormal in that Canada uses soybean oil. It is happening more frequently this year given the premiums canola oil is maintaining over soybean oil.

One thing I encourage everyone to do is to wonder to your local grocery store and have a look at the labels on different vegetable oil/margarine products. Canola oil is a tremendous high quality/healthy oil but most consumers don't recognize this/aren't willing to pay for. More labels have made the shift from "contains canola oil" to "may contain" with a list of vegoils. This year, the chance is the above are code words for soybean oil. It will take effort/time to get canola back on the label again as the sole vegoil. I don't think we should underestimate the impact of this past years drought/shortage of supplies on canola's long term demand base for consumer/other products.

[melvill]

Thanks for bringing up the substitution issue Charlie.

My experience this year talking to producers is that either, they forget to consider the substitution possibilities for many products or they don't know about the substitutes that are out there.

A perfect example is yellow mustard. A lot of yellow mustard is heat treated and used as a binder in processed meat products. A yellow mustard dealer told me that many meat processors have already switched to other binders and it will take a long time and much lower prices for them to switch back. Some of the processor market may have been lost for good. They view mustard as overpriced with an unreliable supply.

Illustrates again the old adage - the worst thing for high prices is high prices.