Audio Transcript:

Hello and welcome to the CHS Broadbent monthly canola market recap. My name is Sam Toll, today I'll just quickly run through a few things we're seeing in the canola markets over the past 3 to 4 weeks.

Looking at the macro level global markets. There is a WASDE crop report out tonight from the US. That report will cover off a lot of issues around export data production and quality issues that we're seeing in the major oil seed producers globally. So that's certainly one to watch.

Quickly, on soybeans in North America. Soybean harvest is roughly about 50 per cent through the harvest. Corn is probably about the same, around halfway through. There is no great bad news coming out of the US. I think the crops and the quality coming through are generally in line with expectations. So there's no new news coming out of that area in terms of harvest issues at the moment. So, we haven't seen anything that's really set the market on fire at the moment in terms of quality or production.

In Europe, I guess the big news or thing we've been watching pretty closely is oil values over there. Oil, canola oil hit another record price, high price this week at around 1800 dollars US at tonne or a bit over. To put that in perspective, that is nearly double what the price of canola oil was this time last year. So it's been a huge step up in oil prices and obviously crushed margins off the back of that, a very, very healthy.

In Canada, the canola harvest is probably 90 percent complete. I think we've spoken previously, I think everyone is aware of the issues that Canadians have had this year, production issues over there. I think the one thing that caught my eye was that canola export data coming out of Canada for August was around 240,000 tonnes. That is the lowest export number out of Canada since 2005. So that's roughly 70 percent lower than what they would normally export in that month on average. And obviously the market's going to be looking for that seed elsewhere. Hence why we're seeing really strong demand for old crop and obviously new crop canola seed out of Australia.

I guess the other key point at the moment is the palm oil market which we don't really look at that closely on a day to day basis. Palm oil prices have skyrocketed over the last three to four weeks. And I think in Malaysia and Indonesia, the two biggest export of the palm oil globally  had big production issues as well. So that's, I guess, adding further fuel to the fire in terms of this oil seed market being extremely volatile and then very strong prices.

On soybeans, I think there's some data out from July to September on global exports. Exports were actually down 24 per cent for that quarter, which is pretty significant. And soybean exports are primarily driven by the Chinese. I think the Chinese demand is down for a number of reasons. I think they built up quite big inventory levels in the months preceding that quarter. So they're quite big stockpiles of beans. They've obviously had issues with COVID like everyone else. Crush margins at the moment aren't that great. And they've obviously had big issues in the pork industry as well. So that's probably been the main contributing factor to those export numbers being well down from July, September. So that's one to watch in terms of the bean markets and also their correlation to the canola. 

Locally here in Australia, price wise, over the last fortnight, you know, we're really seeing the market take off again. I think it's rallied to close to 60 dollars a tonne in the big track market. We haven't quite hit the thousand dollars a tonne track yet, but we got awfully close. Although in the last two sessions in Europe in particular, the market's probably given

 most of that back. And I think maybe that's a market just taking stock of this crop report that's out tonight before it makes its next move. So there's been a lot of volatility still. Where to from here is anyone's guess. We'll just have to wait and see as the weeks roll on.

At a national level here in Australia. We're absolutely on track for a record canola crop this year, which is great news, I think in New South Wales and Western Australia, growers have actually been engaged in selling into these markets in this market with forward contracts.

In Victoria, probably less so. There hasn't been as much grower selling. We've still got at least three to four weeks to get through the frost window. And I think we anticipated that once growers get through that and a bit more production, certainly that they will probably engage and start selling a bit of canola.

So that's just a quick recap from the canola markets. We'll have another update for you in November. Let’s hope that the cool and wettish spring continues and we'll talk again soon.

Thanks for your time.

Cheers.