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Canola market continues to set records
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Canola market continues to set records

Canola

The canola market continues to set records as prices reach record levels in the futures and cash markets.

The canola market continues to set records as prices reach record levels in the futures and cash markets. The recent USDA report on Nov. 9 provided a further boost to the oilseed sector as it slightly reduced the soybean yield estimates. Many in the market were expecting a slight increase in yields. Ending stocks were also estimated at the low end of expectations. Canola prices responded by charging higher following the report. The USDA will likely not influence the commodity markets again until January’s final crop production numbers come in. The Northern Canola Growers Association (NCGA) predicts an increase in average canola yields in that report, as we believe the October yield estimate for North Dakota is too low.

As of Nov. 10, nearby canola prices at area crush plants ranged from $36.00 to $37.08 for November deliveries and $36.00 to $37.45 for December deliveries. Producers continue to report aggressive bids being offered for canola picked up off the farm. New crop 2022 canola prices ranged from $27.71 to $28.45, up nearly $2.50 in the last two weeks. New crop canola has risen more than old crop recently, narrowing the spread between the two. This might be a reflection of increased concern about 2022 canola production in North America as key regions of the Canadian Prairies remain very dry.

ICE January canola closed at $1,004 on Nov. 10, up $15 on the day and up over $40 in the last two weeks. This is a fresh contract high for the January canola futures. The March contract was up $12.50 to $976 per ton.

Board members of the NCGA attended the U.S. Canola Association Fall Meeting recently in Nashville. Members heard from other regions of the U.S. who reported strong interest in canola. A main topic discussed at the meeting was the potential for canola oil to be utilized in the Renewable Diesel market, as well as the Sustainable Aviation Fuel market. All indications are that the burgeoning demand prospects of the renewable fuels market will continue to propel the oil and fat markets. The potential new demand for canola has never appeared greater than at this time.

The canola market continues to be well-supported by the world vegetable oil market, as well as European rapeseed and palm oil, both of which have been near record price levels. The world vegetable oil stocks-to-use ratio just reported by the World Ag Outlook Board shows record-low levels.

The USDA recently revised its estimates of Canadian canola exports, lowering them to 5.7 million metric tons (MMT), while raising its forecast for domestic use to 8.6 MMT. It still forecasting ending stocks of canola in Canada somewhat higher than Agriculture and Agri-Food Canada estimates.

The NCGA also held its 15th Annual Canola Research Conference in Fargo recently. Presentations from that meeting are available on the NCGA website.

The NCGA will hold its 24th Annual Canola Expo on Tuesday, Dec. 14, in Langdon. Keynote speaker Mike Krueger will be featured, as well as new innovations in canola planting. Those interested in attending can get more information at www.northerncanola.com.

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