Canola futures during late July and early August broke through the $480 per ton resistance level and continued higher. The futures price has reached $490 per ton, but was trading lower by a dollar on Aug. 5.

“The canola market continues to grind higher from its recent low in June,” said Barry Coleman, executive director of the Northern Canola Growers Association. “Futures prices have been impressive since the last time we spoke.”

The cash prices at the local crush plants have also seen a price advance. On Aug. 5, the cash prices were trading from $15.33 to $16.30 per hundredweight.

“We have seen the canola contracts the highest we have seen since January,” he said. “It has been an impressive push above what had been stubborn chart resistance in the $480 to $485 area. We see some marketers that have issued a sales recommendation of the first 20 percent of the 2020 crop, given the increase in prices that we have seen. We are in a long-term uptrend when compared to the other crops.”

Coleman also noted that the spec fund traders have made a big move converting from a big net short position in the futures to a net long position. This is the first time in two years that has happened and it is a significant change.

Weekly canola exports out of North America have pushed the crop year totals to 9.88 million tons. This makes the exports likely to hit 10 million tons, since we have one month left in the current marketing year.

“Solid export demands, especially from Europe, added to the export gains. They are running about four times the level from a year ago,” Coleman noted. “The increase in year-over-year exports to Europe has exceeded the year-over-year decline in canola exports to China.”

As far as domestic use, STATS Canada reported 865,000 tons of canola were crushed in June, which is the highest reported in three months. Year-to-date the canola crush is at 9.3 million tons, which is up 10 percent from last year.

“Crush will exceed 10 million tons this year, so if we are looking at exports exceeding 10 million tons and crush exceeding 10 million tons, that’s over 20 million tons and the canola crop for this year was expected to be around 20 million tons,” he said. “So some are saying consumption is exceeding production.”

The latest National Ag Statistics Service indicated the canola crop in North Dakota at 74 percent in good-to-excellent condition and canola coloring was 51 percent, ahead of 37 percent last year, but behind the 61 percent average.

“Over the last three weeks, canola crop conditions have significantly improved, according to the NASS report, so that is good news,” Coleman said. “Things are pretty well on track with the crop.”