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Canola prices staying within summer range


Canola prices attempted a breakout of the summer trading range in recent weeks but have lost potential momentum to move beyond a January contract price of $900 per metric ton (MT). Canola is at the upper end of the price range compared to other oilseeds and this is likely the main reason it has not moved higher. Recent weakness in crude oil has also hampered all vegetable oil prices.

Final canola production in Canada remains uncertain. When looking at individual yield estimates from each of the three main provinces – Alberta, Saskatchewan, and Manitoba – the average yield this year is reported to be 37.2 bushels per acre, or 1,860 pounds. This equates to 17.55 million metric tons (MMT) of canola production. Current USDA estimates are 19 MMT and current Agriculture & Agri-Food Canada (AAFC) estimates are 19.1 MMT. Final numbers will be reported in December and that is when the market will finally know the real production of canola in Canada for 2022. If the final number is indeed as low as 17.55 MMT, the canola market should gain more momentum.

One threat to oilseed markets is the huge production expected out of South America and the recent news has leaned slightly more bullish for North American growers. Forecasters note that the most recent weather models have doubled-down on concerns of drought in southern growing regions of South America. They noted that the northern regions have had ample rain, but current predictions of record production out of South America in the coming year are becoming more uncertain.

The U.S. canola crushing pace continues to track ahead of last year. USDA’s latest Oils & Fats Report shows that 23 percent more canola has been crushed in the current crop year compared to last year. In total, 368,842 tons have been processed in the first two months of the marketing year compared to 299,614 in the same period last year. When compared to two years ago, the pace is catching up, lagging by only 10 percent. The U.S. is expected to crush 2.1 MMT in the current crop year. The canola crush pace and exports in Canada continue to increase, with exports slightly exceeding year ago levels and domestic disappearance in line with last year's pace.

The January ICE canola contract finished the session on Nov. 8 at $884 per MT, down $12 on the day, and up $8 in the last two weeks. The March canola contract ended at $882 per MT, also up in the last two weeks. Soybean oil continues to lead the advance in vegetable oils as it reached 75 cents per pound. Continued talk of renewable diesel demand is providing support to soybean oil and other vegetable oils, as well. Since the middle of July, soybean oil has risen 28 percent.

A consulting firm stated this summer that palm oil will not be able to fill the void needed to meet the burgeoning needs of the biofuels market as it did the last time there was a demand shock for the agriculture market back in 2005 with the adoption of the Renewable Fuels Standard. This time around, deforestation concerns and a limited latitude where palm production can take place are expected to limit palm oil production growth. This statement seems to have been bolstered recently by the announcement by the world's leading food trading companies at the COP27 United Nations Climate Summit that they will eliminate deforestation from their supply chains for soy, beef, and palm oil by 2025.

Local cash prices recently eclipsed the $30 mark. As of Nov. 8, prices at nearby crush plants ranged from $29.19 to $30.70 for November deliveries and $29.19 to $30.50 for December deliveries, up over $1 per hundredweight in the last two weeks.

The Northern Canola Growers Association will hold its 25th Annual Canola Expo in conjunction with the Prairie Grains Conference on December 7-8 in Grand Forks, N.D. The event will feature presentations on insights in canola diseases, new tools for flea beetle control in canola, and the Annual Meeting of the Northern Canola Growers Association. Those interested in attending can get more information at or

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