Market Morsel: Canola back to a premium after years.

Market Morsel

The canola market in Australia has been heavily discounted to overseas values for a long time. In fact, most of the time, it has been since 2021. That has now started to swing.

There are two major future markets for canola (or rapeseed). The Canadian ICE futures and French Matif.

The Canadian canola went to a premium in Australia when they were struggling through drought, and Australian production rose dramatically.

French rapeseed has pretty much always been at a premium to Australia for most of the past decade.

This has all started to change in recent months as we move to a premium (at least for Canada).

The Canadian crop has performed this season so far, with production hitting the highest level since 2018. On the other hand, France has had a poor season, requiring larger volumes to be imported to Europe.

Australia will fit the bill, as a largely non-GM source, and it is generally preferred over the supply from Canada.

So, with this occurring, we can see that Canada has moved to a discount to Australian values, and this shows that demand is strong for Aussie canola.

The question I always get these days from farmers are events – Will Australian canola hit A$1000, it is doubtful for this season. but at least we are sitting at a premium. It could be worse.