The cash prices paid by local crushers showed some upward movement over the first half of November. Barry Coleman, executive director of the Northern Canola Growers Association, said the range was $15.00 to $15.75 for the week ending Nov. 15, with the an increase of 10 cents on the lower end and 60 cents on the upper end. These are prices per hundredweight.
About 7 percent of the canola crop still remains in the field, but growers were generally pleased with the outcome of their crop this year, Coleman said. He based this on the comments growers made during the recent board meeting and research conference in Fargo, N.D. Their canola crop was dry enough to harvest when the small grains were not and the overall quality and yields of this year’s canola crop were good.
Future prices have now switched to the January contract with the latest quote at $462 per ton.
“Recently the futures broke out of their range-bound levels, but the slight rally we had in October seems to have run out of steam,” Coleman said. “The canola futures price at the beginning of this month (November) seems to be where it was at during the beginning of September.
“But it is heartening to see the canola carryout might not grow to the 4.75 million tons that Ag Canada has been forecasting for North America. We are seeing the domestic disappearance of canola is very good compared to the disappearance last year,” he added.
Coleman noted the domestic disappearance is at 2.65 million tons, as of Nov. 13, and that is up 28 percent from last year. If it continues at this pace, the domestic crush will be at 10.6 million tons, which would be a million tons more than last year and what they are projecting for this year.
As far as exports, they had been trending at last year’s levels, however they have taken a little dip and are now just a little below last year’s level at 2.1 million tons.
“Exports need to pick up the slack and the lack of demand from China is the key factor here,” Coleman explained.
One thing that has been adding strength to the market is the increasing price of soy oil and palm oil. Palm oil futures have rallied to a 20-month high with the long-term fundamentals of tightening supplies due to limited palm oil production. Both Indonesia and Malaysia are increasing their biodiesel blending mandates, which is creating more demand for palm oil, and that in turn is impacting world veg oil prices. There is also increased demand for biodiesel in Europe.
“All signs are pointing to stronger veg oil values,” he said.
Finally, the 22nd annual Canola Expo will be held on Dec. 3 at the Langdon Activity Center in Langdon, N.D. Some of the topics to be discussed include: clubroot in Canada, an update on disease management, and the keynote speaker, Elaine Kub, will speak about oilseed markets.
Kub is the author of “Mastering the Grain Markets: How Profits Are Really Made.” She grew up on a family farm in South Dakota, where she is still active in grain and livestock production today.