The following graph shows the movement in ICE November 2018 Canola Futures and the domestic canola price delivered Port Kembla.
The new crop canola price delivered port has increased steadily since January 2018. For the majority of the period the basis remained fairly neutral, however from May, the domestic price has continued to strengthen, despite the futures price falling.
At present the ICE November Futures price is A$519/tonne equivalent and the domestic price is $633/tonne delivered port.
The resultant basis of A$114/tonne equivalent is approximately $62/tonne ahead of the basis at the same time last year.
The domestic canola price at present is above Decile 9 price, calculated on prices from 2009 to date. This compares to a Decile 5 price at the same time last year.
A PKE price of $633/tonne represents $595/tonne local depot with freight to port of $38/tonne. This is likely to be well below clients’ adjusted Break Even Price at drought yields.