Grain Market Update - Canola (September 2013)

The following graph shows the movement in WCE November 2013 Canola Futures and the domestic canola price delivered port. During early June and again during late August, WCE Canola prices spiked at around A$582 and A$569/tonne equivalent, providing good selling opportunities which were taken up by many clients.

The more recent fall in canola prices has been the result of the favourable Canadian harvest. Given the Canadian harvest will continue through until late October, prices are likely to remain depressed for some time.

Market analysts are suggesting that domestic demand for canola during the commencement of the Australian harvest may lead to a spike in prices. Should this occur, it is likely to be short lived, due to end users competing to buy tonnes early.

Currently the WCE Futures price is A$517/t equivalent and the domestic price delivered port is $495/t, reflecting a negative basis of A$22/tonne.