After seeing some good advances in canola prices earlier this fall, the prices now have settled a little lower, according to Lance Kalmbach, grain merchandiser at CHS Sunprairie Grain in Bowbells, ND.
"About 30 days ago we saw some strength in the entire veg oil trade," Kalmbach said. "Now that has kind of turned around. We have seen Argentina rains that have been favorable to conditions there that have come into play and there is a large soybean crop expected in Brazil.
"So in the entire complex the specs were long in bean oil and they are starting to roll out of that and selling, which has put pressure on the market."
This has put a bearish tone to the market and the soybean harvest in Brazil, which should get underway sometime during January, will make the U.S. a little less competitive in soybeans and other oil crops, he noted.
A slight weakening of the Canadian dollar has also played a role in the declining canola market, since the U.S. canola prices are based on the prices at the ICE Futures Canada, and lower prices there mean lower prices south of the border.
Current, farm marketing of canola is rather slow, possibly in response to the recent lower market prices. However, a large part of the crop was moved at harvest time, Kalmbach said.
"We have probably dropped off close to a dollar on price during the last month," he said, "so they have been holding off on moving much at this time."
Looking ahead to later this spring, he expects canola acres to be about the same this year as they were in 2016 in the northwestern part of the state. However, given current trends, he does expect to see a significant increase in soybean acres in his area, which will come at the expense of wheat plantings.
The latest cash prices for February delivery ranged from a low of $17.16 per hundredweight (cwt) at the Velva, ND, plant to a high of $17.80 per cwt at the Cargill plant in West Fargo, ND. Prices for the day in all locations were down from two cents to a nickel on the day.
The prices for all of the crushing plants in the region can be found on the home page of the Northern Canola Growers Association at www.northerncanola.com.