Canola markets are ending 2020 and starting 20201 with some very positive trends, according to Barry Coleman, executive director of the Northern Canola Growers Association. Cash prices at the local crushers on Dec. 23 ranged from $20.00 to $21.60 per hundredweight.
The canola futures price also continues to show strength. The January futures closed Dec. 23 at $638.00 per metric ton, which was the eighth consecutive high in the current drive.
“Demand for oilseeds is clearly on the front-end with all of the futures contracts being inverted,” Coleman said. “As time rolls on, we are going to see more action in the November canola contracts. Canola oil is on a mission to ration its use as the global vegetable oil ending stocks are going to be at the lowest level since the 1990s.”
Malaysian palm oil is now trading at an eight-year high, and they say 15 percent of this year’s palm oil crop will be left in the field due to a COVID-related labor shortage. In addition, Russia is taking measures to curb their exports due to the surge in food prices, and Argentina is having a port strike, which has deterred ships from entering the port and taking on soybeans for export. As a result, we are hearing European soybean business is being shifted to the U.S.
“There are currently over 100 ships waiting outside the ports in Argentina that are waiting to take on loads of soybean oil and soybean meal, but they are not able to,” Coleman reported.
In other positive news, STATS Canada recently lowered its 2020 canola production in Canada to 18.7 million tons, and just last week they put out their supply and demand outdate. It shows that canola ending stocks were revised sharply lower – down to 1.1 million tons. They did that by revising their production lower by 700,000 tons, while increasing their crush estimate by 400,000 tons.
There is talk that canola acres will be up about 2 million acres, or 10 percent, in Canada for 2021, and Coleman expects to see a similar 10 percent increase in canola acres in North Dakota for this coming year as farmers take advantage of the favorable market prices canola offers.