Canola Prices Soar to a 16-Month High, Mirroring Soyoil Gains

(Agrimoney) – Canola prices are breaking 16-month highs, helped by robust exports and crushing, with vegoil prices soaring world-wide.

Prices for the rapeseed-variety benefited from last week’s surge in oilseed prices, in the wake of an upgrade change to US policy which is likely to support biodiesel use there.
And global rapeseed supply is tighter this year, thanks to falling yields and smaller planted area.

‘Strong crush demand’

“Strong crush demand and good export demand continue to send futures values higher,” the Canadian grain trading giant G3 said.

According to the Canadian Oilseed Processors Association, Canadian canola crushing is running at 2.86m tonnes so far this season, compared to 2.49m tonnes at the same time last year.

Supply is also under threat, supporting prices.

The International Grains Council last week noted support to Canadian canola futures, as early losses, tied to prospects for improved harvest weather, were reversed by “ongoing fieldwork delays and firmness in soybeans.”

‘Harvest continues’

Saskatchewan producers have completed 96% of their canola crop, despite weather conditions in the recent months.

“Harvest continues in many parts of the province as weather and field conditions permit,” said the Saskatchewan crop report last week.

But the report said that though farmers were hopeful that the remaining crop would be taken off before winter, there were indications that some crop would be left out until spring.
IGC also noted that some fields might not be cut this year, “owing to rain-related harvest delays and snow cover in some parts.”

However, it said combining could resume next spring, depending on conditions over winter.

Nevertheless, an official survey by the Canadian government said canola quality has been less affected by surplus moisture than other crops, such as wheat.

January ICE Canola futures were up 0.8% in early deals, at CAN$532.20 a tonne, just below the 16-month high of CAN$533.30 a tonne reached on Friday.