With no supporting news, the cash canola prices continue to work lower, according to Barry Coleman, executive director of the Northern Canola Growers Association. The cash prices on July 24 ranged from $14.25 to $14.90 per hundredweight (cwt), which was slightly lower on the low end of the price range from two weeks ago. The futures price that day was in the $450 per ton area, which is basically unchanged from two weeks ago.
Since the start of July, the November canola futures have been in a neutral range of $440 to $450, Coleman noted.
“However, if the futures could get back in the $455 area, which is overhead resistance, that would be encouraging if the markets can get up to that level.
Agriculture and Agri-Food Canada reduced the canola carryover stocks even more in their July report reducing the 2020 carryout estimate from 4.3 million tons to 3.9 million tons. A few months ago they were estimating that carryover to be 5.3 million tons and then stepped it down to 4.3 million tons.
“So the 2020 carryout has been moving in the right direction from a grower’s standpoint,” Coleman said. “The main reason they reduced the carryout was the decreased acreage planted in Canada. They didn’t adjust the yield much and they didn’t adjust exports much.”
In looking at the Canadian canola exports, the total exports were 12 percent lower, but shipments to countries other than China increased 81 percent to 700,000 tons, including 100,000 tons to the European Union. There were six new countries that purchased canola from Canada in May.
“They are saying for the North American canola industry to maintain exports, the sales to these non-China customers are going to have to increase over 50 percent,” Coleman said. “So this 81 percent jump in May was encouraging to see.
“Some are now saying that the large purchases of canola by China from Canada might have pushed out some other customers who were interested in purchasing canola from Canada.”
Recent reported declines in canola production in the European Union, Australia and Canada could pull down the global ending stock of canola to a three-year low. The decline in European production was expected based on a reduction in planted area.
Canola crop conditions slipped a little during the past week, Coleman noted, with 67 percent of the crop in the good-to-excellent condition range, which is a decrease from 69 percent the week before. Several growers interviewed on the recent canola crop tour indicated they had experienced significantly high flea beetle pressure this spring. However, there were many good comments about a newer product called Lumiderm, which offered good control of flea beetles across a wide area of the state.
Finally, canola was one of the focuses at the recent field days at the Minot and Langdon Research Extension Centers. Producers were brought up to date on the latest clubroot developments and learned about a new Omega 3 canola line that has been developed for the fish market. There will be more information on that in future canola market columns.