Audio Script:

Hi, Narelle Free, Grain Merchant from CHS Broadbent, taking you through the canola market for August.

The most recent Stats Can report came out two nights ago now (filmed 1st September 2021) and it has really highlighted the production issues that have impacted the Canadian Prairies this last year. It was slightly better than expected with the Canola production being pegged at 14.7 million metric tonnes when the market was expecting it to be more like a 14.1 million metric tonnes.

So, the oilseed market has been focused on the demand side of the equation with the US requiring on going demand to maintain the elevated price activity that we’ve seen in the US markets this past two months. China has been a consistent buyer of US origin beans in the past fortnight but hasn’t come in for a multimillion tonne purchase which the markets knows they are capable of.

In the US, Profarmer, the well-respected Industry analyst has just finished up their annual crop tour last week and they’ve come up with a soybean estimate of 4.43bln bushels, or a 120 million metric tonnes, which was slightly better than the recent USDA numbers. It’s given the market a bit of confidence that US soybean crop is on track for projected yields. 

So, Australian conditions in key production states of New South Wales and WA continue on track for a big year, and is still likely quite possible for a record production season.

On the east coast, prices rallied another $30 Australia a tonne over the past two weeks with canola trading at $900 track for a day or two last week. 

Where to from here is anyone’s guess but we are up in the stratosphere, so who knows when the pullback might happen. For example, prices for next season, so 22/23 are around $700 Geelong/Melbourne track, so that’s still very high historically but it also serves to remind us that, that $900 canola is an incredible number, we’ve just got to grow it now.