Cash canola prices over the first two weeks of December have improved by 40 to 50 cents per hundredweight (cwt), according to Barry Coleman, executive director of the Northern Canola Growers Association. The increase in prices is from a stronger basis caused by an increase in future prices. The latest future contract prices were $458 a ton, which has resulted in a cash price range at the local crushers of $15.05 to $16.00 per cwt.
Stats Canada came out with their production estimates for all crops for 2019, and the biggest change they noted in that report was for canola. The estimated production is 18.6 million tons, which is down 700,000 tons from their September estimate and will be the lowest amount of canola produced in Canada since 2015.
“They attributed the reduction to a lower harvested area due to less planted acres and the amount of the crop still out there to harvest. One estimate is there is over 2 million acres yet to harvest and another says only half a million acres is left to harvest.
Initially, canola futures bounced up to $3-$4 a ton on that news, but by the end of that day they ended up only a dollar a ton, Coleman noted, which was a huge move.
“There is some caution in the numbers, with many thinking it may be understating the true crop size,” he said. “They came up with an average yield of 40 bushels per acre, which is 2,000 pounds, and the average estimated yield in North Dakota is 1,900 pounds.
“The 700,000 pounds will come directly off the ending stocks figure, which is good news for canola, but also confusing,” Coleman continued. “We have one marketing company that predicts a 4 million ton carryover and another predicts a 2.9 million carryover in Canada. That is a huge difference and we will have to see which one ends up being right. It is a little disappointing that we haven’t seen more market reaction from that reduction in stocks, but there has been talk that canola has been lagging the gains in soy oil and gains in palm oil recently.”
USDA recently came out with their global vegetable oil stocks report. They dropped the estimate by 446,000 tons and the canola oil stocks estimate by 100,000 tons from last month. As a result, the canola oil stocks at the end of this year are expected to be the lowest since the 2008-2009 crop year and the total vegetable oil stocks also to be the lowest since 2009.
“Overall, this is bullish for the vegetable oil market and some think there may be a rally in canola prices in the next month that growers should be on the lookout for,” he said. “But other than that, there is no really bullish news to speak of for the spring unless there is a change in the trade situation with China.”
Domestic use of canola is running ahead of last year – 3.5 million tons vs. 2.9 million tons from last year, meaning domestic use has been strong, which is good.
For the first time Coleman can recall, there is a small amount of canola acreage that will not be harvested until spring in a small area northwest of Langdon. The early snow has matted the crop too close to the ground and the snow will need to melt before it can be harvested.
Finally, Dr. Venkat Cahapra, research pathologist at the Langdon Research Extension Center, received the Excellence in Canola award at the recent Canola Expo in Langdon for his work on canola clubroot disease.