Canola futures prices continue to tick upwards from their levels noted two weeks ago, according to Northern Canola Growers Association executive director Barry Coleman. The nearby futures price on Aug.18 stood at $487.90 per ton, which is well above the resistance price the market mentioned during harvest time.

The cash prices paid for local crushing plants ranged from $15.13 to $16.27 per hundredweight (cwt), which was down slightly from two weeks ago. However, the latest positive trend the market is showing can be proved through the higher cash prices being paid this year when compared to same time last year. The cash price paid at the Velva ADM plant a year ago was $14.20 per cwt., compared to this year’s price of $15.30, which indicated over a dollar increase in cash price this year.

“A tale of two extremes in the weather conditions have been driving the market higher, with wet field conditions noted in Canada and dry conditions in the U.S.,” Coleman said, “both of which are leading to reduce yield potential.

“The futures were also higher today, getting support for Chicago soy oil prices and holding back battling strength in the Canada dollar. That has become a broken record using those comments to describe the improving canola markets,” he continued.

Strength in competing vegetable oils has also given support to canola prices. There is a shortage of Malaysian palm oil and growing exports to China have bolstered domestic soybean prices.

“In addition, the week one export sales of canola out of Canada were 80 percent higher than the five-year average and that means the export sales from Canada are off to a strong start in this new crop year,” he said.

USDA recently reduced the supply of Canada’s ending canola stocks to 1.28 million tons, which will be the smallest carryover in eight years, however, Canadian ag sources are still listing their carryover figure at 2.3 million tons.

“The last time stocks were that tight the canola futures were above $500 per metric ton, so you would think we might have the opportunity to move up in that $500 range,” he noted

Bullish market news also came from the increased USDA figure for soybean oil that will be used in the biodiesel output. They raised the soybean oil usage by 200 million pounds to 7.6 billion pounds, which was good news for all vegetable oil prices.

The recent NASS weekly crop report listed the canola crop as 75 percent in good-to-excellent condition, which is pretty high for this time of the year, Coleman noted. He expects those figures to drop soon due to the hot, dry conditions in the southwestern part of North Dakota. Although, early reports have shown yield of over a ton per acre in that area. About 10 percent of the crop is now harvested, which is in line with the average harvest pace at this time, and the harvest is beginning to ramp up as it moves from the southwest corner of North Dakota up to the northeastern corner.