Grain Market Update - Canola (November 2016)

The following graph shows the movement in ICE November 2016 Canola Futures and the domestic canola price delivered port.

Whilst canola prices fell away earlier in the year, there has been some recovery in recent months. Throughout this period, the basis has remained high. Relative to wheat, canola prices are reasonably strong, allowing those who have not made any forward sales, the opportunity to do so at prices which remain reasonably attractive.

Currently the ICE Futures price is A$494/t equivalent and the domestic price delivered port is $534/t, reflecting a positive basis of A$40/tonne, which is relatively high for current seasonal conditions.

The domestic canola price at present is a Decile 6 price, calculated on prices from 2009 to date.

A port price of $534/tonne represents $496/tonne local depot with freight to port of $38/tonne. The average budget Break Even Price for clients is $422/tonne while that for the top 20% is $353/tonne, at budgeted canola yields.