There have been some hiccups along the way, but this winter has so far been kind to canola futures.
As shown on the nearby March futures chart below, canola has trended higher since hitting its most recent low around $578/tonne in late November. Before faltering on Wednesday following four straight days of gains, the market reached an approximately three-month high of about $667 on Tuesday. That marked an advance of nearly $90, or 15%.
The new-crop November contract has followed a similar path, rising from around $570 in late November to $655 on Tuesday, an identical gain of 15% and an approximately three-month high as well.
The canola market continues to face bearish headwinds given the uncertainty of possible US tariffs and the outcome of China’s ongoing anti-dumping investigation. However, the market continues to be underpinned by solid supply-demand fundamentals. The 2024 crop ended up smaller than expected at 17.845 million tonnes – down 7% on the year – and Statistics Canada’s Feb. 7 stocks report confirmed a dwindling supply amid a heavy export pace and solid domestic use.
At just 11.382 million tonnes, total national stockpiles as of Dec. 31 were down 19.2% from a year earlier. Excluding the 2021 drought year when stocks dropped to 9.338 million tonnes, it was the lowest Dec. 31 canola stocks level since 2012 at just over 8 million.
According to Canadian Grain Commission statistics, cumulative canola exports for the 2024-25 crop year amounted to 5.484 million tonnes as of the week ended Feb. 2, compared to just 2.784 million a year earlier and 29% ahead of the five-year average. Statistics Canada data shows the August-December crush at 4.919 million tonnes, up 7.6% from the same period last year.
In its January supply-demand update, Agriculture Canada forecast 2024-25 canola ending stocks at 1.25 million tonnes, down sharply from 2.75 million in 2023-24 and below the five-year average of 1.82 million.
Ag Canada will release updated supply-demand estimates on Feb. 19.
Source : Syngenta.ca