The hard-charging canola market set a new high today, with the nearby May future busting through the $880/tonne mark before settling lower.
As seen on the May futures chart below, the market has now bested the high posted by the March future back in February at just over $852 and easily surpassed the 2008 high of $744.50.
Tight old-crop supplies have contributed to the strength in canola, with Agriculture Canada currently projecting 2020-21 canola ending stocks at just 700,000 tonnes, way down from 3.13 million a year earlier. That represents a stocks-to-use ratio of just 3%, compared to 15% last year and the five-year average of 14%.
Canola is also being supported by dryness and drought across large portions of the Prairies, especially much of Manitoba and southeastern Saskatchewan, which is already raising concerns about 2021 production. In its latest supply-demand outlook, released on Tuesday, Agriculture Canada warned that spring rains need to be ‘significantly higher than normal’ to return soil moisture to normal growing conditions.
May canola: Source - Barchart
Source: DePutter Publishing Ltd.
Information contained herein is believed to be accurate but is not guaranteed by the parties providing it. Syngenta, DePutter Publishing Ltd. and their information sources assume no responsibility or liability for any action taken as a result of any information or advice contained in these reports, and any action taken is solely at the liability and responsibility of the user.