Market Morsel: Canola to be driven by wider oils

Grain | 25th January 2024 | By Andrew Whitelaw

Market Morsel

It wasn’t that long ago that being offered A$600 per tonne for your canola would be seen as a good deal. These days it seems that A$600 is the opening.

The canola market has largely been flat throughout harvest, with a little uptick recently. Canola prices around the country are up between 2 and 3% month on month but are down around 10% year on year.

At the moment, supply and demand point towards winter crop conditions in many canola-growing regions being reasonable, pointing towards stable supply.

The wider oilseed market will drive the canola market. At the moment, the soybean market has been bearish for much of the past six months.

The production of beans has been downgraded but Argentina has been upgraded with an expected bumper crop. This comes at a time of seemingly reduced demand from China, so we believe that pricing levels where they are likely – don’t expect to see A$800+ anytime soon.

Australian canola prices have been at a discount to overseas values for much of the past three years, but the basis has returned to its best level since 2021.