Grain Market Update - Canola (November 2014)

The following graph shows the movement in WCE November 2014 Canola Futures and the domestic canola price delivered port.

The canola price hit its lowest levels for the year during September/October, however it has strengthened significantly during the last 2-3 weeks. Like wheat, the canola basis is very strong compared to the same time in recent years. Currently the basis is positive A$32/tonne compared to positive A$4/tonne in 2013 and negative A$20/tonne in 2012

Forecasts of the domestic crop are suggesting that production will be sufficient to meet domestic demand. With a large percentage of canola harvested so far still sitting in warehousing, presumably the domestic buyers are confident they will be able to buy canola as they need it, without bidding up the price at present. Assuming this is the case growers may be wise to capture small price spikes as they occur.

Currently the WCE Futures price is A$438/t equivalent and the domestic price delivered port is $470/t, reflecting a positive basis of A$32/tonne.