Grain Market Update - Canola (September 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$520/tonne equivalent and the domestic price is $585/tonne delivered port. The resulting basis of A$65/tonne equivalent is A$78/tonne lower than the basis at the same time last year and A$25/t higher than the 10 year average basis for this time of year. The basis in early September 2016 was A$47/tonne. Therefore, considering the optimistic weather forecast for spring and potential for very high yields, this is a very good price outlook for canola.

The domestic canola price at present is a Decile 9 price, calculated on prices from 2009 to date. This compares with an almost Decile 10 price at the same time last year.

A PKE price of $585/tonne represents $547/tonne local depot with freight to port of $38/tonne. This is likely to be well above clients’ Break Even Price at budgeted yields.