Canola prices continue to show strength during the start of 2020, according to Barry Coleman, executive director of the Northern Canola Growers Association (NCGA). Cash prices at the local crush plants ranged from $15.90 to $16.90 per hundredweight (cwt.), which is an increase of 30 to 60 cents per cwt. from the report two weeks ago.
“There has been a rally in the oil sector starting last month and going into January,” Coleman said. “The canola futures have now moved to the March contract and that contract, as of Jan. 8, was at $482 per ton. They are saying that from $480 to $485 is the resistance level for canola right now. If the price could break $485, they are saying canola could make another run, but the range $480 to $485 remains a troublesome region because it is an entrenched multi-month sideways trading range.”
Recent political happenings, such as the Iran situation and discussion over the Chinese executive arrested in Canada last year, should have some market moving news for canola, as well as the recently USDA report.
Statistics show that palm oil has seen the largest price increase when compared to the other oil seed products this past year and that has pulled other oil prices up, such as soybean and canola, Coleman said.
“They say that canola remains comparatively cheap when compared to the other vegetable oil seeds across the globe and it will continue to pull higher as long as the rally is maintained,” he said.
It has also been reported that there is an increased interest in Canada for renewable diesel and trying to get canola oil eligible for that use, as we are in the U.S., according to Coleman. At this time Canada has no renewable diesel production facilities, but they are expected to start constructing some. They currently import the renewable diesel they use and that comes mainly from the U.S.
“There is a possibility of 2-4 plants being constructed in Canada, which could cost up to $2 billion,” Coleman said. If they did build those facilities, it would require more canola oil production and the seedstock for that oil could require over one million tons of canola.
“We are continuing to get canola oil qualified for renewable diesel in the U.S., and we hope we get good news for the EPA on that matter in the next six months.”
Finally, two important news items occurred during the recent 22nd annual Canola Expo in Langdon, N.D. During the annual business meeting, Pat Murphy of Minot, N.D., was re-elected to the board of directors. Murphy is the president of the NCGA and is also president of the U.S. Canola Association.
Also, Dr. Venkat Chapara, plant pathologist at the Langdon Research Extension Center, was awarded the NCGA Excellence Award for his work with diseases in canola, especially his research on clubroot.