Canola prices for both cash and the futures slid lower during the first couple weeks of July, according to Barry Coleman, executive director of the Northern Canola Growers Association.

“When the USDA announced higher than expected corn acreage on Friday (June 28), initially soybeans and canola jumped up due to the unexpected drop in soybean acres from 84 million acres down to 80 million. But since then they have given back a lot of those gains, so prices are certainly negative at the moment,” Coleman said.

Cash prices, as of July 9, ranged from $14.41 to $14.91 per hundredweight, which is down 74 cents during that period. November futures prices on July 9 stood at $448 a ton, which marks a $16 drop in the last two weeks.

“Last week, when the canola futures hit $450, some marketers were saying there might be another $5 to $10 downside potential,” he said. “It dropped $3 since then and now it is back up to $448, so it is $2 lower. It hasn’t dropped the $5 to $10 on the downside like they predicted. They say corn is going to be the major driver going forward and if the corn market starts to recover in July, it is going to pull canola back up, as well as a lot of other commodities.”

He also added there has been no progress made on the resolution with the Canada-China trade dispute over canola. In fact, it is rumored that China may start to limit trade with Canada to other commodities as well. To offset the loss in canola sales to China, 3-4 million tons of canola will have to find a new home and at this time some are saying Europe is the only market that can handle a large supply such as that.

In recent days Canada has sold some canola to a number of new markets, but the total to those new destinations was only 156,000 tons – well short of the amount of canola cancelled by China.

Overall, the canola crop in Canada is still suffering from moisture shortages in some regions, Coleman noted.

“At this time they are looking at trend yields in Canada for canola,” he said. “They don’t see any reason yet to go below trend lines, but they aren’t going to have bin buster yields either.”

As far as the North Dakota canola crop, in the latest National Ag Statistics Service Crop Condition Report, it was reported that 69 percent of the canola crop was rated in the good-to-excellent categories. The report also said 68 percent of the crop is blooming, which is behind last year’s pace. In the July acreage report, it was estimated that total canola plantings in North Dakota was 1.7 million acres, which is up 7 percent from last year and a record high number in terms of acres.

Finally, the bio-diesel industry was disappointed by the recent Environmental Protection Agency action to not increase the Renewable Fuel Standards volume for biodiesel in 2020, he noted, holding steady at 2.43 million gallons. In addition, the Commerce Department made a preliminary decision to reduce the countervailing duties on imports on bio-diesel from Argentina, which could open the door for more exports from Argentina into the U.S.

In closing Coleman said there wasn’t much good news in the last few weeks to give support to the canola markets.

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