The monthly USDA report, which was released on Nov. 4, continued to lower production levels of both corn and soybeans in the U.S. This powered all of the ag commodity markets higher, according to Barry Coleman, executive director of the Northern Canola Growers Association.

“As a result, canola futures on the ICE was up $10 per ton on the January contract, up to $558 per ton, which moves through what they have been saying is the resistance level of $550 per ton,” Coleman said. “It is quite remarkable to see what has happened to the markets.”

Prices at the local crush plants ranged from $18.54 to $19.70 per hundredweight, which is also a big price improvement over the past several weeks.

One of the reasons for the big price improvement is the tightening of the edible oil supply on a worldwide level. Global ending stocks have dropped below 19 million tons, which will push the stocks-to-use ratio to 6.5 percent, according to Coleman. This is the tightest stocks-to-use ratio for the major oilseeds since 1978.

“Some marketers are saying as long as the vegetable oil situation trend is up that canola price will continue to be positive,” he said. “In a recent U.S. Canola Association virtual meeting, it was said canola crush margins are very good right now, which show the canola price is not overpriced when compared to the price of the end-use products. It was also mentioned there is more optimism for the specialty oils like the high-oleic and Omega-3 oils. So there is some specialty canola oils, which are driving growth in the industry.

“By 2025, we are looking at a goal in North Dakota to be of growing 2 million acres of canola, which we are capable of doing with our crop rotation. This year we raised slightly under 1.5 million acres of canola in the state,” Coleman added.

Export demand continues to be solid out of North America. The Canadian Grain Commission reported that year-to-date exports of canola has been over 3 million tons, which is over a million tons more than last year at this time. However, many of the exports this year have been front-loaded, which wasn’t the case last year. The two destinations that have seen large canola exports is China and the European Union. Exports to China are almost double what they were last year and more impressive has been the jump in exports to Europe, which have increased by over 275 percent. The driver of this high export demand is again the tight world vegetable oil situation.