Soybean prices have increased during the last couple weeks and some thought that would transfer over to the canola market, but thus far that hasn’t happened, according to Barry Coleman, executive director of the Northern Canola Growers Association. Instead canola prices have remained fairly flat heading into October.
The cash price range on Oct. 1 ranged from $14.35 to $14.86 per hundredweight (cwt.) with the price down slightly on the low end of the range and up by a small amount of the upper price levels, when compared to cash prices quoted near the end of September.
On the futures side, prices have also been moving sideways until the first two days of October, when the industry saw a modest price increase, Coleman noted.
“The rally was about $6 a ton, but it is still a range-bound market,” Coleman said. “The 100-day moving average is at $453 a ton, and that barrier has limited upward movement during the last 12 sessions. It is struggling to get out of the range-bound levels.”
A large amount of snow recently received in Alberta, Canada, was expected to also add support to canola prices, but it appears the market isn’t getting overly concerned with weather yet according to little response in the market at this time.
In addition, sub-freezing temperatures in Alberta might have hurt some of the canola crop there that wasn’t fully mature, and this could cause some quality problems for growers in that region once the crop is harvested.
This is the slowest harvest pace for canola in North Dakota in the 20 years of records that have been compiled for crop. The latest National Ag Statistics Service report indicated 67 percent of the canola crop had been harvested as of Sept. 29, up from 61 percent a week earlier. With three or four days suitable for field work, many felt the harvested percentage would be higher in the latest report, but damp conditions have limited harvesting hours and made it difficult for the crop to dry down.
“Most of the canola in the southwestern part of the state has now been harvested,” Coleman noted. “However, across the northern tier of counties, the harvest conditions have not been good and we feel there might be up to one-half million acres of canola in that region that still needs to be harvested. The one good thing is the majority of the canola crop is now straight cut instead of swathed, which will help get the crop harvested.”
In other marketing news, the Canola Council in Canada has estimated losses to the Canadian canola industry due to China shutting off canola imports from Canada were over $1 billion this year due to Chinese trade disputes. No action has been taken by the Canadian government to help offset those losses, and according to Coleman, the growers in Canada are not happy that their government is not providing some type of compensation for that lost market.
The exports from Canada for the current crop year that started on Aug. 1 are over one million tons versus 715,000 a year ago, and domestic use of canola is at 1.3 million tons compared to one million a year ago.
“Year-to-date in the early part of this marketing year, the crop is definitely moving from an export and domestic use standpoint, as it should be with the depressed prices,” he concluded.