Nearby cash canola prices have staged a slight rally over the first two weeks of June, however there has been no change to the new crop market during that same time period. Latest cash prices at the crushing plants in the region ranged from a low of $15.14 to a high of $15.28 per hundredweight. This represents a 22 cent increase from where prices were in mid-May, according to Barry Coleman, executive director of the Northern Canola Growers Association.
Drought conditions in Canada are working to give the nearby prices a boost, according to Coleman.
“The canola market in Canada has incorporated a risk premium due to the uncertainty of the crop,” Coleman said. “Saskatchewan is the largest canola producing province in Canada, but they could have a potential 10 percent drop in yield, which would drop the total Canadian canola production by a significant amount.”
Chart-wise it has been a mixed bag for canola. On May 6, the canola futures dropped to a low of $427 a ton, but since have risen to trading in the $450-$460 range.
“This small rally has caused farmer selling to surge on old crop canola in both North Dakota and in Canada,” he said. “Farmer deliveries were up on the week ending May 31 and commercial stocks are sitting fairly comfortable right now. Canola prices have also received a little support from the bean complex with the adverse rains in the central U.S., which has been bullish for both corn and soybeans.”
A market analysis firm just released their predictions for the European Union canola crop, which cut the estimated production by 11 percent. The canola expected to fill the 5.4 million shortage will come from the Black Sea region and Australia, which means Canadian canola exports might be able to find a home in other parts of the world now being covered by Black Sea and Australian production. In conjunction with that, there has been no movement on resolving the canola trading problems between Canada and China, according to Coleman.
The current futures prices on June 12, when this article was written, had July futures at $455 per ton, which was up a dollar from the day before and October futures were at $465 per ton.
The latest NASS weekly crop report listed 66 percent of the canola crop in good-to-excellent condition. This is down from previous years and is an indication of the slow start to the growing season due to cool temperatures. Canola planting is now 97 percent complete, with 76 percent of the crop emerged.
This late start for canola emergence has caused many growers to spray for flea beetles. The seed treatment only lasts for 21 days after planting, and because of the slow emergence, many growers have had to use a foliar spray to control flea beetle populations. The hot spots in the state right now for flea beetles are areas in Bottineau and Cavalier Counties in the northern areas of the state and a little activity in the southwestern part of the state.