Canola, like soybean prices, had a pretty good February 2018.
The combination of some soybean production risk in Argentina and the Canadian Loonie dropping a bit were the biggest catalysts as to why canola prices have improved as much as they have.
May canola prices pushed back to levels not seen since early December as the market followed global soybean prices higher. Specifically, the May 2018 futures contract listed on the Winnipeg ICE exchanged opened February at $502.80 CAD per metric tonne. It closed February at $524. This is a gain of 4.2% for the month.
Canola prices on the futures board for the November 2018 contract performed not as well, but still pretty good. Canola prices on this new crop contract literally went from $503.80 CAD per metric tonne to $515.30 CAD per metric tonne. This is a gain of 2.2%.
Canola prices on the July 2018 contract actually performed the best as it went from $507 to $529, a positive 4.3% improvement in the month of February.
There was a lot of content that was put out in GrainCents in February for canola prices. We looked at the relatively strong demand structure of the canola complex (and therefore canola prices globally), as well as some of the potential risks to production (and therefore canola prices) about different agronomic choices going into Plant 2018 – namely downside risk to yield for canola-canola rotations. Specifically, we looked at:
• The consistent demand from China and Europe;
• Effects of EU policies towards vegetable oils, namely palm oil;
• the impacts of a crush report going away and a canola buyer going broke;
• Ag Canada’s first forecast at the 2018 canola supply & demand balance sheet
• The risks of canola rotations across Northern America; and,
• Overall high predictions for global canola production.
Moving into the month of March, South American weather will continue to impact canola prices. Be sure to sign up for for free 3-week trial at GrainCents as this month could be the most impactful for how and when you price your canola for the rest of 2017/18 old crop supply, as well as a significant portion of your 2018/19 supply.