Grain Market Update - Canola (November 2020)

The following graph shows the movement in ICE November 2020 Canola Futures price expressed in A$ and the domestic canola price delivered Port Kembla. Also included is the 10 year average ICE November Futures price expressed in A$ and the 10 year average domestic price at Port Kembla.

At present the ICE November Futures price is A$589/tonne equivalent and the domestic price is $605/tonne delivered port. The resulting basis of A$16/tonne equivalent is significantly less than the basis at the same time last year, which was $139/tonne. As the canola harvest is currently underway, the majority of crops are yielding extremely well (2.5 – 3.0t/ha) with oil levels mainly in the 42-43% range.

Like wheat, international canola prices are significantly higher than they were at this time last year, with ICE futures trading around C$560/t compared with around C$460/t last year. This 22% increase in ICE prices has also been moderated by an increase in the A$/C$/ exchange rate from C$0.90 to C$0.95 over the year.

The domestic canola price at present is a Decile 7.8 price, calculated on prices from 2009 to date. This is lower than the same time last year when the price was a Decile 9.9 price, but in absolute terms a very good price for a non-drought year.

A PKE price of $605/tonne represents $567/tonne local depot with freight to port of $38/tonne. This is likely to be well above clients’ Break Even Price at current yield levels.