Canola Prices Flying High, but Easing
June 18, 2021
Canola prices have reached all-time highs, with global demand instigating rapid price growth in the past few months. Strong prices are not only occurring with canola, but with other plant protein meals and oils, such as soy, palm oil, and copra – anything that can be used to meet biodiesel quotas in the European Union (EU) market, as well as supporting the normal levels of the food oil market. However, improved weather and growing conditions in key areas of the Northern Hemisphere have seen prices ease more recently.
Farmonline.com.au reported that changing dynamics in Canada, the world's largest canola exporter, had seen a lack of supply coupled with concerns about the pending crop in the world's key production zones in Canada and the EU. Along with strong demand from China, these factors have created a positive feeling in the Australian canola industry.
Mark Narustrang, from Pivotal Point Strategic Directions, says it will be interesting to see how prices respond as the season progresses, and confidence firms one way or the other. The mood amongst growers has been buoyant. Mark said:
'Speaking to growers, even the street verges are planted with canola’.
With current prices remaining strong, Milne Ruminant Specialist, Brett Blanchett, commented that it will be interesting to see how the canola meal traders go this year in the grain market at harvest. Canola traders are domestically governed by lupin value. With the promising start to the season and the early plantings in the north, there's every indication that lupins will be in surplus again and perhaps drop back in price. If this does limit canola meal prices, the oil content is going to have to be very highly priced for the crushers to be profitable.
Whilst the recent price drop is not ideal for Australian growers, market volatility is not uncommon at this point of the season and there is speculation that prices may spike again before harvest.
Milne grain buyers keep a firm eye on changes in grain market factors to ensure Milne Feeds continues to offer the best prices on finished feed for our customers.
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