Canola prices have given up a lot of the gains they achieved since the first part of the year, according to Barry Coleman, executive director of the Northern Canola Growers Association. This is due to the latest coronavirus scare and the slowness to see returns from Phase One of the new China trade deal.
Cash canola prices on March 12 ranged from a low of $14.35 to a high of $15.45 per hundredweight (cwt). May futures prices closed at $460 a ton on March 16, but quickly fell to $454 a ton the next day and a lot of the commodities experienced a similar drop.
“There are three things that are driving the markets lower – the coronavirus, the crude oil and the stock market,” Coleman said. “We need to see some normal buying start in the new China trade arrangement – that will put some confidence back in the markets. It seems odd with the constantly tightening vegetable oil market supplies that the price for oil crops is dropping.”
USDA’s recently released oilseeds report showed the downward shrinking of world ending stocks of canola, because of certain factors. Estimated imports of canola by European countries will be up this year, despite an anticipated increase in production. As far as Canada goes, the ending canola stocks are estimated at 3.2 million tons, according to Ag Canada, but USDA estimates the Canadian ending stocks at 3.7 million tons.
A lot of canola remains to be marketed this spring, according to Coleman, with a lot marketing in the April-June time frame. Thus far, he had heard of little heat damaged canola coming out of storage.
Also, at the recent board meeting, several research proposals were decided upon, including subjects on disease, insects, and variety differences. Funding totaling over $300,000 was authorized for a dozen different projects.
The U.S. Canola Association also recently held a meeting in Washington, D.C., where one of the main areas of discussion was to recognize canola if a third period of MFP becomes necessary, as well as for biodiesel and renewable diesel programs.
Finally, Pat Murphy was re-elected to two leadership roles – president of the Northern Canola Growers Association and the U.S. Canola Association.